TON Strategy Co Leases Disclosure
7. OPERATING LEASES
The Company leases studio and corporate office space under certain operating lease agreements. The Company determines if an arrangement is a lease at inception. Lease assets are presented as operating lease ROU assets and the related liabilities are presented as operating lease liabilities in the consolidated balance sheets pursuant to ASC 842, Leases.
Operating ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in lease arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives.
On April 1, 2024, the Company entered into a corporate office sublease agreement with a related party for its executive office in Las Vegas, Nevada. The agreement requires the Company to pay $1.5 per month for a term through March 31, 2025. Thereafter, the lease shall continue on a month-to-month basis, subject to termination by either party upon written notice.
On November 18, 2024, the Company entered into a studio office lease agreement for its Go Fund Yourself studio in California. The agreement requires the Company to pay $6 per month for a term through January 31, 2028. In accordance with ASC 842, the Company recognized a right-of-use asset and the related lease liability of $187.
The components of lease expense and supplemental cash flow information related to leases for the period are as follows:
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Lease cost | ||||||||
| Operating lease cost (included in general and administrative expenses in the Company’s statement of operations) | $ | 278 | $ | 148 | ||||
| Other information | ||||||||
| Cash paid for amounts included in the measurement of lease liabilities | $ | 156 | $ | 92 | ||||
| Weighted average remaining lease term – operating leases (in years) | 1.62 | 2.48 | ||||||
| Weighted average discount rate – operating leases | 6.4 | % | 6.8 | % | ||||
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating leases | ||||||||
| $ | 131 | $ | 340 | |||||
| Short-term operating lease liabilities | $ | 129 | $ | 124 | ||||
| Long-term operating lease liabilities | 80 | 222 | ||||||
| Total operating lease liabilities | $ | 209 | $ | 346 | ||||
| Year ending | Operating Leases | |||
| 2026 | $ | 143 | ||
| 2027 | 71 | |||
| 2028 | 6 | |||
| 2029 | ||||
| Total lease payments | 220 | |||
| Less: Imputed interest/present value discount | (11 | ) | ||
| Present value of lease liabilities | $ | 209 | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 25, 2025 | |
| 2023 | Apr 1, 2024 | |
| 2022 | Apr 17, 2023 | |
| 2021 | Mar 31, 2022 | |
| 2020 | Mar 31, 2021 | |
| 2019 | May 14, 2020 | |
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.