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OPERATING LEASES
 12 Months Ended
Dec. 31, 2024
Operating Leases  
OPERATING LEASES

NOTE 7 – OPERATING LEASES

 

The Company periodically enters operating lease contracts for office space and equipment. Arrangements are evaluated at inception to determine whether such arrangements constitute a lease. Right of use assets (“ROU assets”) represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities were recognized on the transition date based on the present value of lease payments over the respective lease term, with the office space ROU asset adjusted for deferred rent liability.

 

  

As of December 31, 2024, the Company had two material operating leases for office space. In March and September of 2023, the Company amended its primary office lease to obtain additional space, as well as extend the term. The leases had remaining lease terms of 72 and eight months as of December 31, 2024. The Company is evaluating its renewal options for the lease expiring in eight months. For practical expediency, the Company has elected to not recognize ROU assets and lease liabilities related to short-term leases.

 

In accordance with ASC Topic 842, Leases, the Company has recorded ROU assets of $1,447,907 and a related lease liability of $1,595,738 as of December 31, 2024. The Company recorded lease expense of $555,192 and $434,066 for the year ended December 31, 2024 and 2023, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $505,017 and $380,576 for the year ended December 31, 2024 and 2023, respectively.

 

The present value of the Company’s operating lease liabilities as of December 31, 2024 is shown below:

 

Maturity of Operating Lease Liabilities

 

   December 31,
2024		 
2025  $466,800 
2026   300,369 
2027   291,220 
2028   295,689 
2029   300,158 
Thereafter   303,891 
      
Total lease payments   1,958,127 
Less imputed interest   (362,389)
Present Value of Lease Liabilities  $1,595,738 
      
Operating lease liabilities – current  $358,687 
Operating lease liabilities – long-term  $1,237,051 

 

As of December 31, 2024, the Company’s operating leases had a weighted average remaining lease term of 5.5 years and a weighted average discount rate of 7.8%.