Massimo Group Leases Disclosure
NOTE 8 — LEASES
On August 1, 2018, the Company signed a lease agreement with Miller Creek Holding LLC, a related party owned by the controlling shareholder, to lease the warehouse and office space of total 220,000 square feet for Massimo Motor with monthly rent of $40,000 used for its operation. The lease expired on July 31, 2021 and was further renewed for another three years and expired on July 31, 2024 with monthly rent of $60,000. On August 1, 2024, the lease was further renewed for another five years and will expire on July 31, 2029 with monthly rent of $145,750. On April 29, 2023, the Company signed another lease agreement with Miller Creek Holding LLC, to rent the warehouse and office space of total 66,000 square feet for Massimo Marine with monthly rent of $35,000 used for its operation. The lease will expire on April 30, 2026. On May 1, 2024, the Company signed another two lease agreements with Miller Creek Holding LLC, to rent additional warehouse and office space of 60,000 square feet and 30,000 square feet for monthly rent of $33,000 and $16,500 used for Massimo Motor and Massimo Marine’s operations, respectively. The leases will expire on August 31, 2029. The Company also had multiple lease agreements for machinery, office equipment and vehicles with other companies. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Total operating lease expense for the years ended December 31, 2025 and 2024 amounted to $3,320,069 and $2,058,524, respectively. Amortization of operating lease right-of-use assets amounted to $2,110,213 and $1,580,172 for the years ended December 31, 2025 and 2024, respectively.
Total accretion of finance lease liabilities for the years ended December 31, 2025 and 2024 amounted to $2,904 and $4,677, respectively. Amortization of finance lease right-of-use assets amounted to $44,192 and $41,748 for the years ended December 31, 2025 and 2024, respectively.
MASSIMO GROUP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 — LEASES (continued)
Supplemental balance sheet information related to operating and financing leases was as follows:
Operating leases
| December 31, 2025 | December 31, 2024 | |||||||
| Operating lease liabilities - current | $ | 1,956,045 | $ | 2,119,894 | ||||
| Operating lease liabilities - non-current | 5,456,648 | 7,412,693 | ||||||
| Total | $ | 7,412,693 | $ | 9,532,587 | ||||
Financing leases
| December 31, 2025 | December 31, 2024 | |||||||
| Finance lease liabilities - current | $ | 23,927 | $ | 43,421 | ||||
| Finance lease liabilities - non-current | 9,676 | 33,602 | ||||||
| Total | $ | 33,603 | $ | 77,023 | ||||
The following table includes supplemental cash flow and non-cash information related to leases:
| December 31, 2025 | December 31, 2024 | |||||||
| Cash paid of amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows used in operating leases | $ | 2,119,894 | $ | 2,011,837 | ||||
| Operating cash flows used in finance leases | $ | 2,904 | $ | 4,677 | ||||
| Financing cash flows used in finance leases | $ | 46,325 | $ | 41,648 | ||||
| Right-of-use assets obtained in exchange for lease obligations: | ||||||||
| Finance lease liabilities | $ | $ | ||||||
| Operating lease liabilities | $ | $ | 9,587,851 | |||||
The weighted average remaining lease terms and discount rates for all of operating lease and finance leases were as follows:
| December 31, 2025 | December 31, 2024 | |||||||
| Weighted-average remaining lease term (years): | ||||||||
| Finance lease | 1.31 years | 1.95 years | ||||||
| Operating leases | 3.53 years | 4.39 years | ||||||
| Weighted average discount rate: | ||||||||
| Finance leases | 5.69 | % | 4.85 | % | ||||
| Operating leases | 8.55 | % | 8.65 | % | ||||
MASSIMO GROUP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 — LEASES (continued)
The following is a schedule of maturities of operating and finance lease liabilities as of December 31, 2025:
Operating leases
| Twelve months ending December 31, | ||||
| 2026 | $ | 2,507,498 | ||
| 2027 | 2,343,000 | |||
| 2028 | 2,343,000 | |||
| 2029 | 1,416,250 | |||
| Total future minimum lease payments | 8,609,748 | |||
| Less: imputed interest | (1,197,055 | ) | ||
| Present value of operating lease liabilities | $ | 7,412,693 |
Finance leases
| Twelve months ending December 31, | ||||
| 2026 | $ | 25,173 | ||
| 2027 | 8,701 | |||
| 2028 | 1,450 | |||
| Total future minimum lease payments | 35,324 | |||
| Less: imputed interest | (1,721 | ) | ||
| Present value of finance lease liabilities | $ | 33,603 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 26, 2025 | |
| 2023 | Apr 15, 2024 | |
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.