Quest Resource Holding CorpQRHC

Quest Resource Holding Corp Leases Disclosure

10-KFiled Mar 12, 20252 min read

8. Leases

Our leases are primarily related to office space and are classified as operating leases for which we recorded a right of use asset at the inception or amendment of each lease. Our primary leases include:

•
Primary headquarters in The Colony, Texas. On September 29, 2022, we executed an amendment to our corporate office lease, pursuant to which we reduced the amount of square space rented to approximately 16,200 square feet and extended the term from October 2022 to December 31, 2027. We recorded a right of use asset associated with this lease of approximately $1.6 million. This lease had a remaining term of 3.0 years at December 31, 2024. We used an effective interest rate of 4.56%, which was our incremental borrowing rate in effect at the date of the lease amendment as the lease does not provide a readily determinable implicit rate.
•
Chadds Ford, PA office. We recorded a right of use asset associated with this lease, which was modified in 2022, of approximately $716 thousand. The lease expires in October 2026. This lease had a remaining term of 1.8 years at December 31, 2024, and we used an effective interest rate of 7.5%, which was our incremental borrowing rate in effect at the acquisition date of RWS as the lease does not provide a readily determinable implicit rate. This lease may be terminated under certain conditions as defined in the lease agreement.

The future minimum lease payments required under our office leases as of December 31, 2024 are as follows (in thousands):

 

Year Ending December 31,

 

Amount

 

2025

 

$

495

 

2026

 

 

484

 

2027

 

 

388

 

Total lease payments

 

 

1,367

 

Less: Interest

 

 

(100

)

Present value of lease payments

 

$

1,267

 

Balance Sheet Classification

The table below presents the lease related assets and liabilities recorded on the balance sheet (in thousands).

 

 

 

As of December 31,

 

 

 

2024

 

 

2023

 

Operating Leases

 

 

 

 

 

 

Right-of-use operating lease assets:

 

 

 

 

 

 

Property and equipment, net and other assets

 

$

1,305

 

 

$

1,862

 

 

 

 

 

 

 

 

Lease liabilities:

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

434

 

 

$

494

 

Other long-term liabilities

 

 

833

 

 

 

1,275

 

       Total operating lease liabilities

 

$

1,267

 

 

$

1,769

 

Lease Costs

For the years ended December 31, 2024 and 2023, we recorded $811 thousand and $754 thousand, respectively, of fixed cost operating lease expense.

Cash paid for operating leases approximated operating lease expense and non-cash right of use asset amortization for the years ended December 31, 2024 and 2023.

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Historical Timeline

Fiscal YearFiled
2024Mar 12, 2025Showing above
2018Mar 14, 2019
2016Mar 31, 2017

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.

Other Available Disclosures

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