LEASE OBLIGATIONS

12 Months Ended

Dec. 31, 2025

Lease Obligations

LEASE OBLIGATIONS

17. LEASE OBLIGATIONS

Beeline Financial leases office space under various operating lease agreements, including an office for its headquarters, for branch location and licensing purposes under non-cancelable lease arrangements that provide for payments on a graduated basis with various expiration dates. Terms of these leases include, in some instances, scheduled rent increases, renewals, purchase options and maintenance costs, and vary by lease. Beeline Financial has leased approximately 9,809 square feet of space in Rhode Island and Australia that expires at various dates through 2028. The Company does not have any financing leases.

As the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate of 10% based on information available at commencement to determine the present value of the lease payments. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the balance sheet and are recognized on a straight-line basis over the lease term. As of December 31, 2025, the amount of right-of-use assets and lease liabilities were $0.4 million and $0.5 million, respectively. As of December 31, 2024, the amount of right-of-use assets and lease liabilities were $1.3 million and $1.5 million, respectively.

During the year ended December 31, 2025, the Company reassessed the lease term for its office headquarters and determined that the Company will not exercise the renewal option. This change in judgment resulted in a reduction of the lease term for the affected leases. As a result of the remeasurement, the Company reduced the right-of-use assets and lease liabilities by $0.5 million and $0.6 million, respectively.

Lease expense for operating leases is recognized on a straight-line basis over the lease term. Aggregate lease expense for the years ended December 31, 2025 and 2024 was $0.2 million and $0.3 million, respectively, and is included in general and administrative expenses in the consolidated statements of operations.

Maturities of lease liabilities as of December 31, 2025 were as follows:

(Dollars in thousands)	Operating Leases			Weighted-Average Remaining Term in Years
2026	$	286
2027		183
2028		37
Total lease payments		506
Less imputed interest (based on 10.0% weighted-average discount rate)		(46	)
Present value of lease liability		460			1.66
Less current portion		239
Lease liabilities, net of current portion	$	221