CID Holdco, Inc. Leases Disclosure
Note 13 - Leases
In June 2024, the Company entered into a non-cancelable operating lease agreement for a facility in Bethesda, Maryland. This lease commenced on July 1, 2024, has a term of 63 months, and has an initial base rent of approximately $7,000 that increases annually by three percent. Under the terms of this lease, the Company is also responsible for their proportionate share of expenses associated with the facility and its premises.
In January 2025, the Company entered into a noncancelable operating lease agreement with an unrelated third-party for a 16,000 square foot facility in Puerto Rico. This lease commenced on February 1, 2025 on a month-to-month basis and became a long-term lease with an initial term of 5 years on June 1, 2025. The initial base rent is $7.00 per square foot, or $9,333 per month, for the first two years, increasing to $7.50 per square foot for the third year and increases by 3% annually thereafter. Under the terms of this lease, the Company is also responsible for their own utilities and a proportionate share of the operating expenses of the premises, not to exceed $3.25 per square foot.
The components of lease expense were as follows for the years ended December 31, 2025 and 2024:
| For the Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating lease cost | $ | 155,617 | $ | 43,106 | ||||
| Other short-term lease cost | 117,134 | 35,006 | ||||||
| Total lease cost | $ | 272,751 | $ | 78,112 | ||||
The following table summarizes the operating lease asset and liabilities recorded as of December 31, 2025 and 2024:
| December 31, 2025 | December 31, 2024 | |||||||
| Operating lease right-of-use asset, gross | $ | 824,314 | $ | 331,478 | ||||
| Accumulated amortization | (122,436 | ) | (23,586 | ) | ||||
| Operating lease right-of-use asset, net | 701,878 | 307,892 | ||||||
| Short-term operating lease liabilities | 139,963 | 36,225 | ||||||
| Long-term operating lease liabilities | 577,656 | 265,413 | ||||||
| Total operating lease liabilities | $ | 717,619 | $ | 301,638 | ||||
| Weighted average operating lease term | 4.16 years | 4.75 years | ||||||
| Weighted average operating lease discount rate | 9.53 | % | 11.83 | % | ||||
The following table summarizes future minimum lease commitments as of December 31, 2025:
| Year ending December 31, | Operating Leases | |||
| 2026 | $ | 200,462 | ||
| 2027 | 207,783 | |||
| 2028 | 215,950 | |||
| 2029 | 197,905 | |||
| 2030 | 42,436 | |||
| Total lease payments | $ | 864,536 | ||
| Less: imputed interest | (146,917 | ) | ||
| Present value of lease liabilities | $ | 717,619 | ||
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.