Turn Therapeutics Inc. Leases Disclosure
| 5. | LEASES |
Operating Lease
We have a single lease for our headquarters, which includes office space in Westlake Village, California. The lease commenced in September 2021 and was set to expire in August 2024. In August 2024, we signed an amendment to the lease agreement for the same office space with a new expiration set to be in August 2027. Monthly payments under the amended lease range from $4.11 thousand to $4.40 thousand.
The aggregate minimum annual lease payments under the operating leases in effect as of December 31, 2025 were:
| Amount | ||||
| 2026 | $ | 51,669 | ||
| 2027 | 35,240 | |||
| Thereafter | ||||
| Total minimum lease payments | 86,909 | |||
| Less: Present value discount | (6,533 | ) | ||
| Present value of operating lease liabilities | 80,376 | |||
| Less: Current portion of operating lease liability | (46,295 | ) | ||
| Operating lease liability, net of current portion | $ | 34,081 | ||
The lease had a remaining term of 1.7 years and 2.7 years as of December 31, 2025 and 2024, respectively. The lease liability was calculated based on a weighted-average discount rate of 9% as of December 31, 2025 and 2024. During the years ended December 31, 2025 and 2024, we made cash payments for amounts included in the measurement of lease liabilities of $49.92 thousand and $42.19 thousand, respectively.
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.