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LEASES

6 Months Ended

Jun. 30, 2025

NOTE 7. LEASES

In April 2018, we entered into a 10-year lease agreement for a new 9,000-square-foot facility that contains office, warehouse, lab and research and development space in Frederick, Maryland. The lease agreement commenced in December 2018 when the property was ready for occupancy. The agreement provided for annual rent of $143,460, an escalation clause that increases the rent 3% year over year, a landlord tenant improvement allowance of $405,000 and additional landlord work as discussed in the lease agreement. We took occupancy of the property on December 17, 2018, and the lease was amended in June 2019 to provide for a 4-month rent holiday and a commencement date of April 1, 2019. A 7% discount rate was determined using our incremental borrowing rate based on the information available at adoption date in determining the present value of lease payments. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

The balances for our operating lease where we are the lessee are presented as follows within our condensed consolidated balance sheet:

	June 30, 2025		December 31,
Operating leases:	(Unaudited)		2024
Assets:
Operating lease right-of-use asset	$	361,790	$	399,254

Liabilities:
Current Portion of Long-Term Operating Lease	$	136,227	$	129,132
Long-Term Operating Lease, net of current portion		444,327		513,395
Total Right of Use Liability	$	580,554	$	642,527

The components of lease expense are as follows and are included within general and administrative expense on our condensed consolidated statement of operations.

	For the three months ended				For the six months ended
	June 30, (Unaudited)				June 30, (Unaudited)
	2025		2024		2025		2024
Operating Lease Expense	$	39,329	$	39,329	$	78,657	$	78,657

Other information related to leases where we are the lessee is as follows:

	June 30, 2025			December 31,
	(Unaudited)			2024
Weighted-average remaining lease term:
Operating leases	3.50 years			4.00 years
Discount rate:
Operating leases		7.00	%		7.00	%

Supplemental cash flow information related to leases where we are the lessee is as follows:

	For the three months ended				For the six months ended
	June 30, (Unaudited)				June 30, (Unaudited)
	2025		2024		2025		2024
Cash Paid for amounts included in
the measurement of lease liabilities	$	41,993	$	41,577	$	83,571	$	81,944

As of June 30, 2025, the maturities of our operating lease liability are as follows:

	Operating
Year Ended:	Lease
July 1 - December 31, 2025	$	85,649
December 31, 2026		175,153
December 31, 2027		180,408
December 31, 2028		185,820
December 31, 2029		34,841
Total Minimum Lease Payments		661,871
Less: Interest		81,317
Imputed value of lease obligations		580,554
Less: Current portion		136,227
Long-term portion of lease obligations	$	444,327