Note 10. Leases

Operating leases

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. During 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 recognized total lease expense, primarily related to operating lease costs paid to lessors from operating cash flows. As of June 30, 2023 and December 31, 2022, the Company recorded a security deposit of $10,000 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 Other Supplemental Information

Future minimum lease payments under operating leases that have initial noncancelable lease terms in excess of one year at June 30, 2023 were as follows:

 Summary of Future Minimum Lease Payments Under Operating Leases