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OPERATING LEASES
 3 Months Ended
Mar. 31, 2025
Operating Leases  
OPERATING LEASES

NOTE 6 – 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 March 31, 2025, the Company had two material operating leases for office space. The leases had remaining lease terms of 72 and five months as of March 31, 2025, respectively. The lease expiring in 72 months was previously set to expire in 69 months, but was amended in March 2025 to extend the lease an additional three months. The Company intends to renew the lease expiring in five 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 $1,173,851 and a related lease liability of $1,317,657 as of March 31, 2025. The Company recorded lease expense of $131,568 and $138,798 for the three months ended March 31, 2025 and 2024, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $135,594 and $133,509 for the three months ended March 31, 2025 and 2024, respectively.

 

The present value of the Company’s operating lease liabilities as of March 31, 2025 is shown below:

 

Maturity of Operating Lease Liabilities

  

   March 31,
2025		 
Remainder of 2025  $310,779 
2026   286,751 
2027   291,220 
2028   295,689 
2029   300,158 
2030   303,891 
Thereafter   77,090 
      
Total lease payments   1,865,578 
Less imputed interest   (547,921)
Present Value of Lease Liabilities  $1,317,657 
      
Operating lease liabilities – current  $229,710 
Operating lease liabilities – long-term  $1,087,947 

 

As of March 31, 2025, the Company’s operating leases had a weighted average remaining lease term of 5.7 years and a weighted average discount rate of 13.0%.