NextPlat Corp Leases Disclosure
Note 19. Leases
The Company has entered into a number of lease arrangements under which the Company is the lessee. These leases are classified as operating leases. In addition, the Company has elected the short-term lease practical expedient in ASC Topic 842 related to real estate leases with terms of one year. The following is a summary of the Company’s lease arrangements.
Finance Lease Agreements
In May 2018, Progressive Care entered into a finance lease obligation to purchase pharmacy equipment with a cost of approximately $115,000. The terms of the lease agreement require monthly payments of approximately $1,700 plus applicable tax over 84 months ending March 2025 including interest at the rate of 6%.
Operating Lease Agreements
On December 2, 2021, NextPlat Corp. entered into a 62-month operating lease for approximately 4,141 square feet of office space located in Florida (the “Florida Lease”). The lease commenced upon occupancy on June 13, 2022 and was scheduled to expire on August 31, 2027. Initial annual base rent was approximately $186,000, subject to 3% annual increases. The Florida Lease did not require contingent rental payments, impose financial restrictions, or contain any residual value guarantees. On November 11, 2025, the Company entered into a lease termination agreement with the landlord to terminate the Florida Lease prior to its contractual expiration date. Pursuant to the termination agreement, the Company was required to pay an early termination fee of approximately $120,000. In accordance with ASC 842, the Company accounted for the termination agreement as a lease modification that resulted in termination of the lease. Upon execution of the termination agreement, the Company remeasured the lease liability and derecognized the related ROU asset. The difference between (i) the carrying amounts of the lease liability and ROU asset and (ii) the termination payment was recognized in the Consolidated Statements of Operations and Comprehensive Loss during the year ended December 31, 2025. The $120,000 termination fee is included in operating expenses within the Consolidated Statements of Operations and Comprehensive Loss. Following the termination, the Company has no remaining obligations under the Florida Lease.
The Company leases office and warehouse facilities located in Poole, England. The Company previously leased approximately 2,660 square feet of office and warehouse space under a lease arrangement with annual rent of approximately (approximately $37,100 based on an average exchange rate of 1.24 GBP to USD). The lease was renewed on October 6, 2022 and expired on October 31, 2023, and was subsequently renewed for an additional -month term. On August 1, 2024, the Company relocated from its previous Poole, England facility and entered into a new operating lease for office and warehouse space at a new location in Poole, England (the “Poole Lease”). The relocation resulted in termination of the prior lease agreement. The Poole Lease has a -year term commencing August 1, 2024 and expiring on July 31, 2027. Annual base rent under the Poole Lease is approximately through July 31, 2025, approximately through July 31, 2026, and approximately through July 31, 2027.
Outfitter leases office space located at 2727 Old Elm Hill Pike, Nashville, Tennessee (the “Nashville Lease”). The lease commenced in April 2024 and originally had a contractual expiration date of April 2026. The lease agreement required monthly lease payments of approximately $4,800. In December 2025, the Company executed a First Amendment to the lease agreement extending the lease term through April 1, 2027 and revising lease payments effective January 1, 2026. In accordance with ASC 842, the amendment was evaluated as a lease modification. As the modification extended the lease term and revised future lease payments without granting an additional right-of-use separate from the original lease, the Company accounted for the amendment as a modification of the existing operating lease. Accordingly, the Company remeasured the operating lease liability as of the modification date using a revised discount rate, with a corresponding adjustment recorded to the related right-of-use asset.
Progressive Care entered into a lease agreement for its Orlando pharmacy in August 2020. The term of the lease is 66 months with a termination date of February 2026. The lease agreement calls for monthly payments that began in February 2021, of $4,310, with an escalating payment schedule each year thereafter.
Progressive Care leases its North Miami Beach pharmacy location under an operating lease agreement with a lease commencement date in September 2021. The term of the lease is 60 months with a termination date in August 2026. The lease calls for monthly payments of $5,237, with an escalating payment schedule each year thereafter.
Variable expenses generally represent the Company’s share of the landlord’s operating expenses.
Right-of-use assets for operating leases are periodically reduced by impairment losses. We use the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant, and Equipment – Overall, to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize. For the year ended December 31, 2024, the Company recorded approximately $0.1 million of impairment loss related to the write-down of a right-of-use asset as a result of taking the leased equipment out of service and not returning to service in the future. There were no impairments related to the write-down of right-of-use assets for the year ended December 31, 2025.
We recognized lease costs associated with all leases as follows (in thousands):
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating lease cost: | ||||||||
| Fixed rent expense | $ | 486 | $ | 603 | ||||
| Variable rent expense | 182 | 65 | ||||||
| Finance lease cost: | ||||||||
| Amortization of right-of-use assets | 5 | 20 | ||||||
| Interest expense | — | 1 | ||||||
| Total Lease Costs | $ | 673 | $ | 689 | ||||
Supplemental cash flow information related to leases was as follows (in thousands):
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows from operating leases | $ | 522 | $ | 427 | ||||
| Financing cash flows from finance leases | 5 | 24 | ||||||
| Total cash paid for lease liabilities | $ | 527 | $ | 451 | ||||
Supplemental balance sheet information related to leases was as follows (in thousands):
| December 31, 2025 | December 31, 2024 | |||||||
| Operating leases: | ||||||||
| Operating lease right-of-use assets, net | $ | 189 | $ | 812 | ||||
| Operating lease liabilities: | ||||||||
| Current portion | 158 | 404 | ||||||
| Long-term portion | 41 | 438 | ||||||
| $ | 199 | $ | 842 | |||||
| Weighted average remaining lease term (years) | 1.14 | 2.25 | ||||||
| Weighted average discount rate | 5 | % | 4 | % | ||||
| Finance leases: | ||||||||
| Finance lease right-of-use assets, net | $ | — | $ | 5 | ||||
| Finance lease liabilities: | ||||||||
| Current portion | — | 5 | ||||||
| Long-term portion | — | — | ||||||
| $ | — | $ | 5 | |||||
| Weighted average remaining lease term (years) | — | 0.24 | ||||||
| Weighted average discount rate | — | 6 | % | |||||
Future minimum lease payments are as follows (in thousands):
| Years Ending December 31, | Finance Lease | Operating Lease | Total Future Lease Commitments | |||||||||
| 2026 | $ | — | $ | 163 | $ | 163 | ||||||
| 2027 | — | 40 | 40 | |||||||||
| 2028 | — | — | — | |||||||||
| 2029 | — | — | — | |||||||||
| 2030 | — | — | — | |||||||||
| Total lease payments to be paid | — | 203 | 203 | |||||||||
| Less: future interest expense | — | (4 | ) | (4 | ) | |||||||
| Lease liabilities | — | 199 | 199 | |||||||||
| Less: current maturities | — | (158 | ) | (158 | ) | |||||||
| Long-term portion of lease liabilities | $ | — | $ | 41 | $ | 41 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 24, 2025 | |
| 2023 | Apr 11, 2024 | |
| 2022 | Mar 31, 2023 | |
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.