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Leases | 12 Months Ended
--- | ---
Dec. 31, 2024
Leases |
Leases | 8. Leases The Company has leases for corporate and operational facilities (“real estate leases”). Real estate leases. Substantially all real estate leases have remaining terms of six (6) to nine (9) years, with additional five (5) year extensions available. All of these leases require a fixed lease payment that contains an annual lease payment escalation provision ranging from 3% to 4% per year. The components of lease expense were as follows:
|  | YEARS ENDED |
|  | DECEMBER 31, |
|  | 2024 |  |  | 2023 |
Operating lease expense |  | $ | 16,684 |  |  | $ | 12,463 |
Finance lease expense: |  |  |  |  |  |  |  |
Amortization of right of use assets |  | $ | 673,108 |  |  | $ | 684,600 |
Interest on finance lease liabilities |  |  | 186,367 |  |  |  | 214,954 |
Total finance lease expense |  | $ | 859,475 |  |  | $ | 899,554 |
Lease expense is included in general and administrative expenses in the consolidated statement of operations. Amortization of right of use assets is included in depreciation and amortization in the consolidated statement of operations. Supplemental cash flow information related to leases was as follows:
|  | YEARS ENDED |
|  | DECEMBER 31, |
|  | 2024 |  |  | 2023 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flows from leases |  | $ | 203,051 |  |  | $ | 227,417 |
Financing cash flows from leases |  |  | 636,456 |  |  |  | 586,833 |
Right of use assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |
Operating leases |  | $ | 828,608 |  |  | $ | - |
Supplemental balance sheet information related to leases was as follows:
|  | DECEMBER 31, |
|  | 2024 |  |  | 2023 |
Lease right of use assets, net |  | $ | 4,183,561 |  |  | $ | 4,045,222 |
Current portion of lease liabilities |  |  | 735,152 |  |  |  | 638,258 |
Lease liabilities, net of current portion |  |  | 4,200,019 |  |  |  | 4,114,516 |
Weighted average remaining lease term |  |  |  |  |  |  |  |
Finance leases |  |  | 7.2 |  |  |  | 10.2 |
Operating lease |  |  | 4.3 |  |  |  | - |
Weighted average discount rate |  |  |  |  |  |  |  |
Finance leases |  |  | 3.5 | % |  |  | 3.5 | %
Operating lease |  |  | 7.3 | % |  |  | - |
Maturities of lease liabilities as of December 31, 2024, were as follows:
|  | Operating Leases |  |  | Finance Leases |
2025 |  | $ | 209,604 |  |  | $ | 717,272 |
2026 |  |  | 217,032 |  |  |  | 665,480 |
2027 |  |  | 224,676 |  |  |  | 633,663 |
2028 |  |  | 232,536 |  |  |  | 695,939 |
2029 |  |  | 60,150 |  |  |  | 296,985 |
Thereafter |  |  | - |  |  |  | 1,931,136 |
Total undiscounted lease payments |  |  | 943,998 |  |  |  | 4,940,475 |
Less: Imputed interest |  |  | 131,760 |  |  |  | 817,542 |
Total lease liability |  | $ | 812,238 |  |  | $ | 4,122,933 |
On November 1, 2024 the Company entered into a new lease agreement, to sublease from a commercial organization, additional warehouse space in the Columbus Ohio area to support planned growth in its Device as a Service (DaaS) offering. The lease commenced on November 15, 2024 and is for a term of fifty-three months, with a monthly rent obligation of $17,500, subject to annual rent increase of 3.5%. The operating lease resulted in the Company recording a leased right to use asset of $828,608 and associated liability.

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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Topic 840 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/840/tableOfContent + Details
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