Note 11. Leases

Operating lease

We have a noncancelable operating lease entered in November 2016 for our warehouse space that expired in July 2021 and had renewal options 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 May 31, 2024. The Company had the option to terminate the lease after 12 months and 24 months from the commencement date. The office facility monthly “Base Rent” was $11,855 and the Base Rent was increased by 2.5% each year.

We have a new lease contract entered June 1, 2024 which includes both our office facility and warehouse space that expires May 31, 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 December 31, 2024 and 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 December 31, 2024, were as follows:

Schedule of Future Minimum Lease Payments Under Operating Leases

Sublease

On August 1, 2021, the Company entered into a Sublease Agreement with its related party and a principal shareholder (“Sublandlord”), whereby the Company shall sublease certain offices, rooms and shared use of common spaces located at 150 Sykes Creek Parkway, Merritt Island, FL. The Lease is a month-to-month lease and may be terminated with 30 days’ notice to the Sublandlord. The monthly rent shall be $4,570 from inception through January 31, 2022, $4,707 from February 1, 2022 to January 31, 2023 and $4,847 from February 1, 2023 to January 31, 2024. On February 1, 2024, the Company extended the month-to-month Sublease agreement. The monthly rent shall be $4,618.03 from February 1, 2024 to January 31, 2025, $4,756.57 from February 1, 2025 to January 31,2026 and $4,899.27 from February 1, 2026 to January 31, 2027. A common area maintenance fee (CAM) will be charged in addition to the monthly rent. During the years ended December 31, 2024 and 2023, the Company recorded $79,005 and $58,024 directly related to this short-term month to month lease to lease expenses.