NOTE 8—LEASES

 

Operating Leases

 

The Company leases medical clinic and corporate office facilities under operating lease arrangements with remaining lease terms ranging from approximately one to seven years. Certain leases include renewal options that may be exercised at the Company’s discretion. The Company’s leases do not include material residual value guarantees or restrictive covenants.

 

The following was included in the balance sheets at December 31, 2025 and 2024:

 

   2025   2024 
   December 31, 
   2025   2024 
Operating lease right-of-use assets  $482,553   $641,651 
           
Operating lease liabilities, current portion   130,050    138,743 
Operating lease liabilities, long-term   365,966    496,017 
Total operating lease liabilities  $496,016   $634,760 
           
Weighted-average remaining lease term (years)   4.9    5.8 
Weighted average discount rate   7.8%   9.0%

 

The components of net lease expense consisted of the following for the years ended December 31, 2025 and 2024:

 

   2025   2024 
   December 31, 
   2025   2024 
Operating lease expense  $205,252   $139,390 
Variable lease expense   (88)   8,365 
Total lease expense   205,164    147,755 
Sublease (income)   -    - 
Total net lease expense  $205,164   $147,755 

 

 

Operating lease right-of-use assets is included within “Other non-current assets” on the accompanying consolidated balance sheets. Cash payments included in the measurement of operating lease liabilities were $166,320 and $149,029 for the years ended December 31, 2025 and 2024, respectively. The decrease in respective periods was primarily due to the closing of redundant office locations.

 

Estimated future minimum payments of operating leases for the next five years consists of the following at December 31, 2025:

 

Year Ending December 31,  Amount 
2026  $164,150 
2027   86,366 
2028   87,444 
2029   83,886 
2030   86,404 
Thereafter   88,996 
Total   597,247 
Less: imputed interest   (101,231)
Total operating lease liabilities  $496,016 

 

Finance Leases

 

On April 22, 2024, the Company entered into an equipment financing lease to purchase medical equipment for $10,976, which matures in July 2029. The Company paid off the equipment financing lease in 2025.

 

The following was included in the balance sheets at December 31, 2025 and 2024:

 

   2025   2024 
   December 31, 
   2025   2024 
Leased medical equipment (property and equipment)  $10,976   $10,976 
Less: accumulated depreciation   (3,842)   (1,646)
Total leased medical equipment, net  $7,134   $9,330 
           
Finance lease liabilities, current portion   -    2,030 
Finance lease liabilities, long-term   -    7,615 
Total finance lease liabilities  $-   $9,645 
           
Weighted-average remaining lease term (years)   -    4.6 
Weighted average discount rate   -%   2.0%

 

Historical Timeline

Fiscal YearFiled
2025Mar 30, 2026Showing above
2024Mar 28, 2025

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.