CISO Global, Inc. Leases Disclosure
NOTE 14 – LEASES
During the years ended December 31, 2024 and 2023, we recognized additional ROU assets and lease liabilities of $60,215 and $733,782, respectively. We elected to not recognize ROU assets and lease liabilities arising from short-term office leases, leases with initial terms of twelve months or less (deemed immaterial) on the consolidated balance sheets.
When measuring lease liabilities for leases that were classified as operating leases, we discounted lease payments using its estimated incremental borrowing rate. The weighted average incremental borrowing rate applied was 11.54%. As of December 31, 2024, our leases had a remaining weighted average term of 3.22 years.
The following table presents net lease cost and other supplemental lease information:
| Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||
| Lease cost | ||||||||
| Operating lease cost (cost resulting from lease payments) | $ | 294,383 | $ | 270,638 | ||||
| Short term lease cost | 32,759 | 156,828 | ||||||
| Net lease cost | $ | 327,142 | $ | 427,466 | ||||
| Operating lease – operating cash flows (fixed payments) | $ | 294,383 | $ | 270,638 | ||||
| Operating lease – operating cash flows (liability reduction) | $ | 219,342 | $ | 199,069 | ||||
| Non-current leases – right of use assets | $ | 537,173 | $ | 762,228 | ||||
| Current liabilities – operating lease liabilities | $ | 170,289 | $ | 219,342 | ||||
| Non-current liabilities – operating lease liabilities | $ | 428,070 | $ | 596,307 | ||||
Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the year ended December 31, 2024, are as follows:
| Fiscal Year | Operating Leases | |||
| 2025 | $ | 217,377 | ||
| 2026 | 223,177 | |||
| 2027 | 229,145 | |||
| 2028 | 51,662 | |||
| Total future minimum lease payments | 721,361 | |||
| Amount representing interest | (123,002 | ) | ||
| Present value of net future minimum lease payments | $ | 598,359 | ||
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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.