FLEXIBLE SOLUTIONS INTERNATIONAL INC Leases Disclosure
3. LEASES
In January 2016, NanoChem Solutions Inc. leased a space in Naperville, IL for office and research and development. The lease was for an initial five years and renewable every five years for a further five years. In March 2024, the Company consolidated NanoChem operations into the Peru, IL locations and terminated the lease in Naperville, IL. The Company had to pay a penalty of $35,910 and forfeited the $5,440 security deposit to terminate the lease early and incurred a loss of $41,350 on early termination of the lease that is shown on the consolidated statement of income and comprehensive income as a part of non-operating income (loss). The table below summarizes the right-of-use asset and lease liability for the periods ended December 31, 2024 and 2023.
| Right of Use Assets | ||||
| Balance at December 31, 2022 | $ | 167,222 | ||
| Amortization | (51,929 | ) | ||
| Balance at December 31, 2023 | $ | 115,293 | ||
| Amortization | (13,694 | ) | ||
| Early termination of lease | (101,599 | ) | ||
| Balance at December 31, 2024 | $ | |||
| Lease Liability | ||||
| Balance at December 31, 2022 | $ | 167,222 | ||
| Lease interest expense | 6,151 | |||
| Payments | (58,080 | ) | ||
| Balance at December 31, 2023 | $ | 115,293 | ||
| Lease interest expense | 1,186 | |||
| Payments | (14,880 | ) | ||
| Early termination of lease | (101,599 | ) | ||
| Balance at December 31, 2024 | $ | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 31, 2025 | Showing above |
| 2021 | Mar 29, 2022 | |
| 2020 | Mar 31, 2021 | |
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.