Note 10. Leases

Operating lease

We have a noncancelable operating lease entered in November 2016 for our office facility that expired in July 2021 and was renewed to May 2024. The monthly “Base Rent” was $10,392 and the Base Rent was 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 which included both our office and warehouse space that expired in May 2024. The Company had the option to terminate the lease after 12 months and 24 months from the commencement date. The monthly “Base Rent” was $11,855 and the Base Rent was increased by 2.5% each year.

We have a new lease contract entered in June 2024 which includes both 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 September 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:

Schedule of Operating lease expense 

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

Summary of Supplemental Balance Sheet Information 

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

Schedule of Future Minimum Lease Payments Under Operating Leases