Note 9. Leases

 

On December 1, 2021, the Company entered into a Lease Agreement (the “Company’s Lease”) with Trump Tower Commercial LLC, a New York limited liability company. Under the Company’s Lease, the Company rents a portion of the twenty-second floor at 725 Fifth Avenue, New York, New York (the “22nd Floor Premises”). The Company currently uses the 22nd Floor Premises to run its day-to-day operations. The initial term of the Company’s Lease is seven (7) years commencing on July 11, 2022 (“Commencement Date). Under the Company’s Lease, the Company is required to pay monthly rent, commencing on January 11, 2023, equal to $12,874. Effective for the sixth and seventh years of the Company’s Lease, the rent shall increase to $13,502. The Company took possession of the 22nd Floor Premises on the Commencement Date.

 

On September 23, 2022, Dominari Financial entered into a Lease Agreement (“Dominari Financial’s Lease”) with Trump Tower Commercial LLC, a New York limited liability company. Under Dominari Financial’s Lease, Dominari Financial rents a portion of a floor at 725 Fifth Avenue, New York, New York (the “Premises”). Dominari Financial currently uses the Premises to run its day-to-day operations. The initial term of Dominari Financial’s Lease is seven (7) years commencing on the date that possession of the Premises is delivered to Dominari Financial. Under Dominari Financial’s Lease, Dominari Financial is required to pay monthly rent equal to $49,368. Effective for the sixth and seventh years of Dominari Financial’s Lease, the rent shall increase to $51,868 per month. The Company took possession of the Premises in February 2023.

  

The tables below represent the Company’s lease assets and liabilities as of December 31, 2024 and 2023:

 

   December 31,   December 31, 
   2024   2023 
Assets:        
Operating lease right-of-use-assets  $2,944   $3,335 
           
           
Liabilities:          
Current          
Operating   410    421 
Long-term          
Operating   2,629    3,028 
   $3,039   $3,449 

 

The following tables summarize quantitative information about the Company’s operating leases, under the adoption of ASC 842:

 

   December 31,   December 31, 
   2024   2023 
Weighted-average remaining lease term – operating leases (in years)   5.5    6.5 
Weighted-average discount rate – operating leases   10.0%   10.0%

During the years ended December 31, 2024 and 2023, the Company recorded approximately $0.8 million, both years, of lease expense to current period operations.

 

    Year Ended     Year Ended  
    December 31,
2024
    December 31,
2023
 
Operating leases            
Operating lease cost   $ 712     $ 668  
Short-term lease rent expense     119       105  
Net rent expense   $ 831     $ 773  

 

Supplemental cash flow information related to leases were as follows: 

 

   Year Ended   Year Ended 
   December 31,   December 31, 
   2024   2023 
Operating cash flows - operating leases  $391   $359 
Right-of-use assets obtained in exchange for operating lease liabilities  $
-
   $2,780 

 

As of December 31, 2024, future minimum payments during the next five years and thereafter are as follows:

 

   Operating 
   Leases 
Year Ended December 31, 2025  $698 
Year Ended December 31, 2026   685 
Year Ended December 31, 2027   685 
Year Ended December 31, 2028   766 
Year Ended December 31, 2029   784 
Thereafter   376 
Total   3,994 
Less present value discount   (955)
Operating lease liabilities  $3,039 
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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.