v3.26.1
RIGHT-OF-USE ASSETS
 12 Months Ended
Dec. 31, 2025
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
RIGHT-OF-USE ASSETS

NOTE－ 8 RIGHT-OF-USE ASSETS

 

The Company adopted ASU No. 2016-02 Leases, on January 1, 2019, the beginning of the fiscal 2019, using the modified retrospective approach. The Company determines whether an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys the right to control the use of an identified fixed asset explicitly or implicitly for a period of time in exchange for consideration. Control of an underlying asset is conveyed if we obtain the rights to direct the use of and to obtain substantially all of the economic benefit from the use of the underlying asset. Some of our leases include both lease and non-lease components which are accounted for as a single lease component as the Company has elected the practical expedient. Some of the operating lease agreements include variable lease costs, primarily taxes, insurance, common area maintenance or increases in rental costs related to inflation. Substantially all of our equipment leases and some of our real estate leases have terms of less than one year and, as such, are accounted for as short-term leases as we have elected the practical expedient.

 

Operating leases are included in the right-of-use lease assets, current lease liabilities and long-term lease liabilities on the Consolidated Balance Sheet. Right-of-use assets and lease liabilities are recognized at each lease’s commencement date based on the present values of its lease payments over its respective lease term. When a borrowing rate is not explicitly available for a lease, the incremental borrowing rate is used based on information available at the lease’s commencement date to determine the present value of its lease payments. Operating lease payments are recognized on a straight-line basis over the lease term.

 

The Company adopts 5.00% as weighted average incremental borrowing rate to determine the present value of the lease payments. The weighted average remaining life of the lease for office equipment and leasehold building was 3.5 years and for machinery and equipment was 2.2 years.

 

The carrying amount of right-of-use assets by class of underlying asset are as follows:

 

   As of
Dec 31, 2024		   As of
Dec 31, 2025		 
    S$’000    S$’000 
           
At cost:          
Leasehold buildings   2,072    2,072 
Office equipment   20    20 
Right-of-use assets, gross   2,092    2,092 
Less: Accumulated depreciation   (893)   (2,081)
           
Right-of-use assets, net   1,199    11 

 

Right-of-use assets under operating leasing arrangements classified under leasehold buildings as of December 31, 2024 and 2025 amounted to S$2.1 million for both years.

 

The table below presents the lease-related assets and liabilities recorded on the balance sheet.

 

   As of
Dec 31, 2024		   As of
Dec 31, 2025		 
   S$’000   S$’000 
         
Assets          
Operating lease, right-of-use asset, net   1,199    11 
           
Total right-of-use asset   1,199    11 
           
Liabilities          
Current:          
Operating lease liabilities   1,209    4 
Operating lease liabilities current   1,209    4 
           
Non-current:          
Operating lease liabilities   12    8 
 Operating lease liabilities noncurrent    12    8 
           
Total operating lease liabilities   1,221    12 

 

 

The Company excludes short-term leases (those with lease terms of less than one year at inception) from the measurement of lease liabilities or right-of-use assets. The following tables summarize the lease expense for the years.

 

   As of
Dec 31, 2023		     As of
Dec 31, 2024		   As of
Dec 31, 2025		 
   S$’000      S$’000    S$’000 
                   
Operating lease cost:                  
Operating lease expense (per ASC 842)    422      951    1,217 
                   
Short-term lease expense (other than ASC 842)    120      120    323 
                   
Total lease expense    542      1,071    1,540 

 

Components of Lease Expense

 

We recognize lease expense on a straight-line basis over the term of the operating leases, as reported within “general and administrative” expense on the accompanying consolidated statement of operations.

 

Future Contractual Lease Payments as of December 31, 2025

 

The below table summarizes our (i) minimum lease payments over the next five years, (ii) lease arrangement implied interest, and (iii) present value of future lease payments for the next three years ending December 31:

 

Year ending December 31, 

Operating and

finance

lease amount

 
   S$’000 
Right of Use Assets     
2026   5 
2027 – 2030   8 
Less: interest     
2026   (1)
Present value of lease liabilities – Right of Use Assets   12 
      
Representing:     
Current liabilities – Right of Use Assets   4 
Non-current liabilities – Right of Use Assets   8 
Operating lease liabilities – Right of Use Assets   12 
      
Hire Purchase     
2026   7,130 
2027 – 2030   7,900 
Less: interest     
2026   (528)
2027 onwards   (350)
      
Present value of lease liabilities – Hire Purchase   14,152 
      
Representing:     
Current liabilities – Hire Purchase   6,602 
Non-current liabilities – Hire Purchase   7,550 
Finance lease liabilities – Hire Purchase   14,152 
      
Representing:     
Current liabilities   6,606 
Non-current liabilities   7,558 
      
Lease liabilities   14,164 

 

 SCHEDULE OF OPERATING LEASE SUPPLEMENTAL CASH FLOWS INFORMATION

   2023   2024   2025 
   Year ended December 31 
   2023   2024   2025 
   S$’000   S$’000   S$’000 
Supplemental Cash Flows information               
Cash paid for amounts included in the measurement of lease liability:               
Operating cash flows from operating lease   7,764    8,638    9,573 
                
Operating lease asset obtained in exchange for operating lease obligations               
Operating lease   9,439    8,360    10,383 
                
Remaining lease term               
Operating lease   3.5 years    2.5 years    2.2 years 
Discount rate               
Operating lease   5.76%   5.15%   4.77%