NOTE 16 LEASES

 

In January 2024, the Company entered into a lease for office space and car parking bays in Malta. The term of the lease is for six years, although the Company may terminate the lease at any time after three years. The monthly rent payment for the office is approximately $15 thousand for the first year, with a 3% annual increase.

 

Right-of-use assets for these administrative office leases as of December 31, 2025 and December 31, 2024, are summarized as follows:

 

 

 

December 31,

 

December 31,

 

(in thousands)

 

2025

 

2024

 

Malta Office

 

 

826

 

 

910

 

Operating lease, right-of-use asset, net

 

$

826

 

$

910

 

 

The Company has no other material operating or financing leases with terms greater than 12 months.

 

Lease expense for operating leases recorded in the balance sheet is included in operating costs and expenses and is based on the future minimum lease payments recognized on a straight- line basis over the term of the lease plus any variable lease costs. Operating lease expenses, inclusive of short-term and variable lease expenses, included in the Company’s consolidated statements of operations for the years ended December 31, 2025 and 2024, were $199 thousand and $232 thousand, respectively. We have a month to month lease in Las Vegas. 

 

Annual maturities analysis under the Malta lease agreement at December 31, 2025 is as follows:

 

Year ending December 31,

 

 

 

 

2026

 

$

219

 

2027

 

 

225

 

2028

 

 

231

 

2029

 

 

237

 

Total

 

 

912

 

Less: Present value discount

 

 

(105)

 

Lease obligations, net

 

$

807

 

 

Operating lease obligations are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate on the date of adoption of ASU 2016-02, Leases. As of December 31, 2025, the weighted average remaining lease term is 4 years and the weighted average discount rate used to determine the operation lease liability was 4.5%.

 

Historical Timeline

Fiscal YearFiled
2025Mar 10, 2026Showing above
2024Mar 21, 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.