CitroTech Inc. Leases Disclosure
Note 7 – Lease
In March 2022, the Company entered into an operating lease for a warehouse, with a term of eighteen (18) months. In July 2023, the Company amended the contract and extended the lease term to July 2025. In May 2025, the Company terminated this lease and wrote off the right-of-use asset and lease liability.
In January 2025, the Company entered into an operating lease for our office and warehouse. The commencement date is April 1, 2025, and the termination date is March 31, 2030. The Company recorded a security deposit of $36,991.
For the years ended December 31, 2025 and 2024, right-of-use asset and lease information about the Company’s operating lease consists of:
| Years ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| The components of lease expense were as follows: | ||||||||
| Operating lease cost | $ | 190,068 | $ | 85,992 | ||||
| Short-term lease cost | 86,131 | 75,252 | ||||||
| Variable lease cost | 21,156 | 22,125 | ||||||
| Total lease cost | $ | 297,355 | $ | 183,369 | ||||
Supplemental cash flow information related to leases was as follows:
| Years ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash paid for operating cash flows from operating leases | $ | 220,224 | $ | 98,917 | ||||
| Right-of-use asset obtained in exchange for new operating lease liabilities | $ | 865,218 | $ | – | ||||
| Weighted-average remaining lease term - operating leases (year) | 4.25 | 0.58 | ||||||
| Weighted-average discount rate — operating leases | 7.00% | 6.50% | ||||||
The following table outlines maturities of our lease liabilities as of December 31, 2025:
| Year ending December 31, | ||||
| 2026 | $ | 195,412 | ||
| 2027 | 203,228 | |||
| 2028 | 211,357 | |||
| 2029 | 219,812 | |||
| Thereafter | 55,486 | |||
| Operating leases, future minimum payments due | 885,295 | |||
| Less: Imputed interest | (120,084 | ) | ||
| Operating lease liabilities | $ | 765,211 | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 30, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
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.