Vivos Therapeutics, Inc. Leases Disclosure
NOTE 11 - LEASES
Operating Leases
We have entered into various operating lease agreements for certain offices, medical facilities and training facilities. These leases have original lease periods expiring between 2022 and 2029. Most leases include an option to renew and the exercise of a lease renewal option typically occurs at the discretion of both parties. For purposes of calculating operating lease liabilities, lease terms are deemed not to include options to extend the lease until it is reasonably certain that we will exercise that option. As of December 31, 2024, we are party to three leases in Colorado and one in Utah, these leases have an expiration date between 2025 and 2029.
In addition to base rent in these leases, we also pay our proportionate share of the operating expenses, as defined in the leases. These payments are made monthly and adjusted annually to reflect actual charges incurred for operating expenses, such as common area maintenance, taxes, and insurance.
As of December 31, 2024 and 2023, the components of lease expense are as follows (in thousands):
| Lease cost: | 2024 | 2023 | ||||||
| Operating lease cost | $ | 483 | $ | 481 | ||||
| Total operating lease cost | $ | 483 | $ | 481 | ||||
Rent expense is recognized on a straight-line basis over the lease term. Lease expense, including real estate taxes and related costs for the years ended December 31, 2024 and 2023 aggregated approximately $0.5 million, respectively. This is included under general and administrative expense.
As of December 31, 2024 and 2023, the remaining lease terms and discount rate used are as follows (in thousands):
| 2024 | 2023 | |||||||
| Weighted-average remaining lease term (years) | 2.8 | 3.7 | ||||||
| Weighted-average discount rate | 8.4 | % | 8.3 | % | ||||
Supplemental cash flow information related to leases as of December 31, 2024 and 2023 is as follows (in thousands):
| 2024 | 2023 | |||||||
| Cash flow classification of lease payments: | ||||||||
| Cash paid for operating lease liabilities | $ | 613 | $ | 602 | ||||
As of December 31, 2024 and 2023, the maturities of our future minimum lease payments were as follows (in thousands):
| As of December 31, | ||||
| 2025 | 585 | |||
| 2026 | 507 | |||
| 2027 | 493 | |||
| 2028 | 133 | |||
| 2029 | 7 | |||
| Total lease payments | 1,725 | |||
| Less: Imputed interest | (213 | ) | ||
| Total | $ | 1,512 | ||
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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.