Empery Digital Inc. Leases Disclosure
NOTE 14 – LEASES
The components of lease cost for operating leases for the year ended December 31, 2024 and 2023 is as follows:
| 2024 | 2023 | |||||||
| Lease Cost | ||||||||
| Operating lease cost | $ | 468,996 | $ | 468,997 | ||||
| Short-term lease cost | 169,051 | 215,289 | ||||||
| Total lease cost | $ | 638,047 | $ | 684,286 | ||||
Supplemental cash flow information related to leases for the year ended December 31, 2024 and 2023, is as follows:
| 2024 | 2023 | |||||||
| Other Lease Information | ||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows from operating leases | $ | 399,609 | $ | 359,347 | ||||
| Amortization of right-of-use assets | $ | 396,979 | $ | 369,774 | ||||
The following table summarizes the lease-related assets and liabilities recorded on the balance sheet at December 31, 2024 and December 31, 2023:
| 2024 | 2023 | |||||||
| Lease Position | ||||||||
| Operating Leases: | ||||||||
| Operating lease right-of-use assets | $ | 739,234 | $ | 1,136,213 | ||||
| Right-of-use liabilities operating leases short-term | 443,950 | 399,611 | ||||||
| Right-of-use liabilities operating leases long-term | 331,222 | 775,170 | ||||||
| Total operating lease liabilities | $ | 775,172 | $ | 1,174,781 | ||||
The Company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable.
| Lease Term and Discount Rate | December 31, 2024 | |
| Weighted-average remaining lease term (years): | ||
| Operating leases | 1.7 | |
| Weighted-average discount rate: | ||
| Operating leases | 6.82% |
The following table provides the maturities of lease liabilities at December 31, 2024:
| Operating | ||||
| Leases | ||||
| 2025 | 485,702 | |||
| 2026 | 340,591 | |||
| Total future undiscounted lease payments | 826,293 | |||
| Less: Interest | (51,121 | ) | ||
| Present value of lease liabilities | $ | 775,172 | ||
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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.