NOTE 15 - LEASES

The Company leases offices space under non-cancellable operating leases. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheets.

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Loss from early termination of lease contract were 717,633 and 2,218,120 for the years ended December 31, 2025 and 2024, respectively, resulting from the early termination of the Company’s operating leases.

A summary of lease cost of continuing operations recognized in the Company’s consolidated statements of operations and comprehensive loss were as follows:

	For the Years Ended December 31,
	2025		2024

Operating leases cost excluding short-term lease expenses	$	2,490,512	$	3,392,185
Short-term lease expenses		195,406		316,959
Total	$	2,685,918	$	3,709,144

A summary of supplemental information related to operating leases held for continuing operations were as follows:

	December 31, 2025			December 31, 2024
Cash paid for amounts included in the measurement of lease liabilities	$	1,167,694		$	3,955,966
Weighted average remaining lease term	2.05 years			4.28 years
Weighted average discount rate		6.42	%		7.58	%

The Company’s lease agreements do not have a discount rate that is readily determinable. The incremental borrowing rate is determined at lease commencement or lease modification and represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and an amount equal to the lease payments in a similar economic environment.

The following table summarized the maturity of lease liabilities held for continuing operations under operating leases as of December 31, 2025:

	Operating Leases
For the years ended December 31,
2026		1,466,487
2027		748,048
2028		152,758
2029		42,799
Total lease payments		2,410,092
Less: imputed interest		134,202
Total		2,275,890
Less: current portion		1,434,441
Non-current portion		841,449

A summary of lease cost of discontinued operations recognized in the Company’s consolidated statements of operations and comprehensive loss were as follows:

	For the Years Ended December 31,
	2025		2024

Operating leases cost excluding short-term lease expenses	$	-	$	509,552
Short-term lease expenses		240,765		427,390
Total	$	240,765	$	936,942

A summary of supplemental information related to operating leases held for discontinued operations were as follows:

	December 31, 2025		December 31,2024
Cash paid for amounts included in the measurement of lease liabilities	$	33,427	$	511,628
Weighted average remaining lease term		-		-
Weighted average discount rate		-		3.18	%

No lease liabilities held for discontinued operations under operating leases as of December 31, 2025.

Historical Timeline

Fiscal Year	Filed
2025	Apr 15, 2026	Showing above
2024	Apr 1, 2025

2023	Apr 1, 2024

2022	Jun 30, 2023

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Cenntro Inc. Leases Disclosure

Historical Timeline

About Leases Disclosures

Other Available Disclosures