Hour Loop, Inc Leases Disclosure
NOTE 9 - Leases
The Company had two operating leases (Flywheel’s office leases in Taiwan) as of December 31, 2025. The leased assets in Flywheel are presented as operating lease right-of-use assets.
The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the operating lease liabilities recorded in the statements of financial position as of December 31, 2025:
| Flywheel | Flywheel | |||||||
| June 2025 | December 2025 | |||||||
| Initial lease term | to June 2027 | to November 2028 | ||||||
| Initial recognition of operating lease right-of-use assets | $ | 127,226 | $ | 79,971 | ||||
| Weighted-average remaining lease term at December 31, 2025 | 1.5 | 2.92 | ||||||
| Weighted-average discount rate at December 31, 2025 | 3.33 | % | 3.33 | % | ||||
Operating lease liabilities-current as of December 31, 2025 and 2024 were $92,362 and $114,540, respectively. Operating lease liabilities-non-current as of December 31, 2025 and 2024 were $83,271 and $--, respectively. The operating lease right-of-use assets balance as of December 31, 2025 and 2024, were $169,368 and $111,409, respectively.
For the years ended December 31, 2025 and 2024, the amortization of the operating lease right-of-use asset was $153,964 and $211,348, respectively. These amounts were recorded in general and administrative expenses. Additionally, for the years ended December 31, 2025 and 2024, the Company made lease payments of $150,960 and $208,843, respectively, which were included in the operating cash flows statements.
The future minimum lease payment schedule for all operating leases as of December 31, 2025, is as disclosed below.
| For the Year Ending December 31, | Amount | |||
| 2026 | $ | 94,036 | ||
| 2027 | 61,330 | |||
| 2028 | 26,890 | |||
| 2029 and thereafter | ||||
| Total minimum lease payments | 182,256 | |||
| Less: effect of discounting | (6,623 | ) | ||
| Present value of the future minimum lease payment | 175,633 | |||
| Less: operating lease liabilities-current | (92,362 | ) | ||
| Total operating lease liabilities-non-current | $ | 83,271 | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 24, 2026 | Showing above |
| 2024 | Mar 27, 2025 | |
| 2023 | Mar 26, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2021 | Apr 1, 2022 | |
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.