Quarterly report pursuant to Section 13 or 15(d)

Leases

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Leases
6 Months Ended
Jun. 30, 2024
Leases  
Leases

Note 10. Leases

 

Operating lease

 

We have a noncancelable operating lease entered in November 2016 for our office facility that expires in July 2021 and has renewal options to May 2024. The monthly “Base Rent” is $10,392 and the Base Rent is increased by 2.5% each year. In May 2023 the Company exercised its option and extended the lease to May 31, 2024.

 

 

In May 2021, we entered into a new lease agreement for our office and warehouse space that expires in May 2024. The Company shall have the option to terminate the lease after 12 months and 24 months from the commencement date. The monthly “Base Rent” is $11,855 and the Base Rent may be increased by 2.5% each year.

 

We have a new lease contract entered in June 2024 for our office facility and warehouse space that expires in May 2025. The monthly “Base Rent” is $11,876 and $12,767.

 

We recognized total lease expense, primarily related to our operating leases, on a straight-line basis in accordance with ASC 842.

 

As of June 30, 2024 and December 31, 2023, the Company recorded a refundable security deposit of $10,000 for its warehouse space and is included in other assets on the balance sheet.

 

The operating lease expense were as follows:

 

    2024     2023  
    Six months ended June 30,  
    2024     2023  
Operating lease cost   $ 188,741     $ 175,055  

 

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

 

    June 30,     December 31,  
    2024     2023  
Operating lease right-of-use assets at inception   $ 284,861     $ 1,276,515  
Accumulated amortization     (22,854 )     (1,160,942 )
Total operating lease right-of-use assets   $ 262,007     $ 115,573  
                 
Right-of-use assets obtained in exchange for new operating lease liability   $ 284,861     $ -  
                 
Operating lease liabilities - current   $ 262,007     $ 119,272  
Operating lease liabilities - non-current     -       -  
Total operating lease liabilities   $ 262,007     $ 119,272  
                 
Weighted-average remaining lease term — operating leases (year)     0.92       0.42  
Weighted-average discount rate — operating leases     8.25 %     4.73 %

 

Future minimum lease payments under operating leases that have initial noncancelable lease terms in excess of one year at June 30, 2024 were as follows:

 

    Total  
Year Ended December 31,        
2024 - Remaining 6 months   $ 147,859  
2025     123,216  
Thereafter     -  
Total Undiscounted lease payments     271,075  
Less: Imputed interest     (9,068 )
Operating lease liabilities     262,007