LEASES

12 Months Ended

Dec. 31, 2024

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

Massimo Group 10-K/A