Toppoint Holdings Inc. Leases Disclosure
NOTE 8: LEASES
The Company leases an office, parking area and automobiles under non-cancelable operating lease agreements. The leases have remaining lease terms ranging from to five years.
Supplemental balance sheet information related to leases is as follows:
| Balance Sheet Location | December 31, 2025 | December 31, 2024 | ||||||
| Operating Leases | ||||||||
| Right-of-use assets, net | $ | 458,614 | $ | 675,561 | ||||
Right-of-use assets – related parties, net | 74,559 | 82,098 | ||||||
| Lease liability, current maturities | (174,344 | ) | (130,552 | ) | ||||
Lease liability, current maturities – related parties | (63,586 | ) | ||||||
| Lease liability, net of current maturities | (144,954 | ) | (331,833 | ) | ||||
Lease liability, net of current maturities – related parties | (5,473 | ) | ||||||
| Total operating lease liabilities | $ | (388,357 | ) | $ | (462,385 | ) | ||
| Weighted Average Remaining Lease Term | ||||||||
| Operating leases | 1.56 years | 2.68 years | ||||||
| Weighted Average Discount Rate | ||||||||
| Operating leases | 25 | % | 25 | % | ||||
The Company calculated the implicit rate on the automobile lease with information contained in the respective leases. Based upon the lease agreements, the Company was able to calculate such amount. As the office lease did not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments, which is reflective of the specific term of the leases and economic environment of each geographic region.
The Company’s leased automobile is currently used for promotional services. These leases often contain large material upfront downpayments due to the fact that they are expensive automobiles which are necessary for business development.
The Company’s has entered into two office leases with related parties, which are the chief executive officer and a family member of the chief executive officer.
Anticipated future lease costs, which are based in part on certain assumptions to approximate minimum annual rental commitments under non-cancelable leases, are as follows:
| Period Ending December 31, | Operating | |||
| 2026 | $ | 306,018 | ||
| 2027 | 165,512 | |||
| Total lease payments | 471,530 | |||
| Less: Imputed interest | 83,173 | |||
| Present value of lease liabilities | $ | 388,357 | ||
Total lease expense for leases accounted for under ASC 842 amounted to $438,197 and $408,197 for the years ended December 31, 2025 and 2024, respectively, of which $130,000 and $100,000, respectively, were incurred in connection with leases from related parties.
The Company has various other leases which do not fall under the guidance of ASC 842, primarily because there is not an identified asset. Such leases are not included in any amounts noted above.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 25, 2026 | Showing above |
| 2024 | Apr 15, 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.