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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

9. Commitments and Contingencies

 

From time to time we are involved in legal proceedings, claims and litigation related to employee claims, contractual disputes and taxes in the ordinary course of business. Although we cannot predict the outcome of such matters, currently we have no reason to believe the disposition of any current matter could reasonably be expected to have a material adverse impact on our financial position, results of operations or the ability to carry on any of our business activities.

 

Employment Agreements

 

We have entered into employment agreements with three of our key executives, including one of our founders. Under their respective employment agreements, the executives are bound by typical confidentiality, non-solicitation and non-competition provisions. Two of the executives have severance arrangements.

 

Leases

 

For each of the below listed leases, management has determined it will utilize the base rental period and have not considered any renewal periods.

 

Location  Square Feet   Monthly Rent   Lease Expiry
Columbus, OH   6,000   $5,400   December 31, 2028
Madison Heights, MI   36,000   $44,930   August 31, 2026
Sterling Heights, MI   37,000   $22,312   April 30, 2028
Traverse City, MI   5,200   $5,100   January 31, 2026
              
Temporary space             
Madison Heights, MI   3,200   $1,605   month to month
              
Vehicles and equipment             
various   n/a    $10,160   September 30, 2028

 

The following table sets forth the future minimum lease payments under our leases:

 

For the Years Ending December 31  Finance Lease   Operating Leases 
2025  $89,954   $956,826 
2026   81,849    721,664 
2027   69,624    355,972 
2028   49,508    166,884 
2029   7,533    - 
Less imputed interest   (45,183)   (197,474)
   $253,285   $2,003,872 

 

 

The following table summarizes the components of lease expense:

 

For the Year Ending December 31,  2024   2023 
Finance lease expense:          
Amortization of ROU assets  $71,326   $42,115 
Interest on lease liabilities   26,198    16,514 
Operating lease expense   945,001    954,040 
Short-term lease expense   19,254    19,254 

 

The following tables set forth additional information pertaining to our leases:

 

 

For the Year Ending December 31,  2024   2023 
Cash paid for amounts included in the measurement of lease liabilities:          
Financing cash flows from finance leases (interest)  $26,198   $16,514 
Financing cash flows from finance leases (principal)   61,874    34,954 
Operating cash flows from operating leases   787,537    720,889 
ROU assets obtained in exchange for new finance lease liabilities   89,289    107,610 
Weighted average remaining lease term – finance leases   3.6 years    4.2 years 
Weighted average remaining lease term – operating leases   2.6 years    3.5 years 
Discount rate – finance leases   9.72%   8.87%
Weighted average discount rate – operating leases   6.89%   7.01%