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LEASES
 12 Months Ended
Dec. 31, 2024
Leases  
LEASES

NOTE 8 — LEASES

 

On August 1, 2018, the Company signed a lease agreement with Miller Creek Holding LLC, a related party owned by the controlling shareholder, to lease the warehouse and office space of total 220,000 square feet for Massimo Motor with monthly rent of $40,000 used for its operation. The lease expired on July 31, 2021 and was further renewed for another three years and expired on July 31, 2024 with monthly rent of $60,000. On August 1, 2024, the lease was further renewed for another five years and will expire on July 31, 2029 with monthly rent of $145,750. On April 29, 2023, the Company signed another lease agreement with Miller Creek Holding LLC, to rent the warehouse and office space of total 66,000 square feet for Massimo Marine with monthly rent of $35,000 used for its operation. The lease will expire on April 30, 2026. On May 1, 2024, the Company signed another two lease agreements with Miller Creek Holding LLC, to rent additional warehouse and office space of 60,000 square feet and 30,000 square feet for monthly rent of $33,000 and $16,500 used for Massimo Motor and Massimo Marine’s operations, respectively. The leases will expire on August 31, 2029. The Company also had multiple lease agreements for machinery, office equipment and vehicles with other companies. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 

Total operating lease expense for the years ended December 31, 2024 and 2023 amounted to $2,058,524 and $1,104,769, respectively. Amortization of operating lease right-of-use assets amounted to $1,580,172 and $974,973 for the years ended December 31, 2024 and 2023, respectively.

 

Total accretion of finance lease liabilities for the years ended December 31, 2024 and 2023 amounted to $4,677 and $7,048, respectively. Amortization of finance lease right-of-use assets amounted to $41,748 and $42,113 for the years ended December 31, 2024 and 2023, respectively.

 

 

MASSIMO GROUP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 8 — LEASES (continued)

 

Supplemental balance sheet information related to operating and financing leases was as follows:

 

Operating leases

 

   December 31, 2024   December 31, 2023 
         
Operating lease liabilities - current  $2,119,894   $847,368 
Operating lease liabilities - non-current   7,412,693    630,853 
Total  $9,532,587   $1,478,221 

 

Financing leases

 

    December 31, 2024     December 31, 2023  
             
Finance lease liabilities - current   $ 43,421     $ 41,647  
Finance lease liabilities - non-current     33,602       77,024  
Total   $ 77,023     $ 118,671  

 

The following table includes supplemental cash flow and non-cash information related to leases:

 

   December 31, 2024   December 31, 2023 
Cash paid of amounts included in the measurement of lease liabilities:           
Operating cash flows used in operating leases   $2,011,837   $1,104,769 
Operating cash flows used in finance leases  $4,677   $7,048 
Financing cash flows used in finance leases   $41,648   $40,003 
Right-of-use assets obtained in exchange for lease obligations:           
Finance lease liabilities   $-   $60,805 
Operating lease liabilities   $9,587,851   $1,113,140 

 

The weighted average remaining lease terms and discount rates for all of operating lease and finance leases were as follows:

 

   December 31, 2024   December 31, 2023 
Weighted-average remaining lease term (years):          
Finance lease   1.95 years    2.85 years 
Operating leases   4.39 years    1.82 years 
           
Weighted average discount rate:          
Finance leases   4.85%   4.61%
Operating leases   8.65%   8.61%

 

 

MASSIMO GROUP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 8 — LEASES (continued)

 

The following is a schedule of maturities of operating and finance lease liabilities as of December 31, 2024:

 

Operating leases

 

Twelve months ending December 31,     
Operating leases     
2025  $2,857,880 
2026   2,507,498 
2027   2,343,000 
2028   2,343,000 
2029   1,416,250 
Total future minimum lease payments   11,467,628 
Less: imputed interest   (1,935,041)
Present value of operating lease liabilities  $9,532,587 

 

Finance leases

 

Twelve months ending December 31,     
Finance leases     
2025  $46,325 
2026   25,172 
2027   8,701 
2028   1,451 
Total future minimum lease payments   81,649 
Less: imputed interest   (4,626)
Present value of finance lease liabilities  $77,023