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NOTE 5 — Commitments and Contingencies (Policies) | 12 Months Ended
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Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract] |
Operating Lease Obligations | Operating Lease Obligations In February 2022, the Company entered into a lease agreement for approximately 35,913 square feet at 40675 Encyclopedia Circle in Fremont, California. This location serves as the Company’s Corporate Headquarters, including office space and manufacturing. The base monthly rent in the amount of $50,278, subject to annual increases of 3%. The Company accounted for the lease as an operating lease under ASC 842 using the bank loan interest rate in effect on May 1, 2022 at 5.0% to discount future lease payments. The lease term expires on July 31, 2029, with a one-time option to renew for a period of five years. The renewal period is not included in the measurement of the leases as the Company is not reasonably certain of exercising it. In July 2022, the Company also signed a two-year equipment operating lease agreement and the future lease payments are discounted at the interest rate of 5.5%. As of December 31, 2023, the balances of right-of-use assets and liabilities were approximately $3.09 million and $3.29 million, respectively, compared to approximately $3.56 million and $3.74 million, respectively, on December 31, 2022. The operating lease expense under the existing agreement was allocated in cost of goods sold and operating costs based on department headcount and amounted to $648,434 and $646,821 for the twelve-month periods ended December 31, 2023 and 2022, respectively. Cash payments included in the measurement of our existing operating lease liabilities were $622,243 and $517,174 for the twelve-month periods ended December 30, 2023 and 2022, respectively. Future minimum lease payments under the existing operating lease as of December 31, 2023 are shown below:
Annual minimum payments: |  | Amount
2024 |  |  | 636,861 |
2025 |  |  | 652,883 |
2026 |  |  | 672,470 |
2027 |  |  | 692,644 |
2028 |  |  | 713,423 |
Thereafter |  |  | 425,646 |
Total minimum payments |  |  | 3,793,927 |
Less: Present value factor |  |  | (501,894 | )
Total operating lease liabilities |  |  | 3,292,033 |
Less: Current portion of operating lease |  |  | (483,161 | )
Long-term portion of operating lease |  | $ | 2,808,872 |
Purchase Commitments | Purchase Commitments On December 31, 2023, the Company’s non-cancelable purchase commitments for inventory to be used in the ordinary course of business during 2024 were approximately $5,821,000.
Legal Matters | Legal Matters The Company is subject to disputes, claims, requests for indemnification and lawsuits arising in the ordinary course of business. Under the indemnification provisions of the Company’s customer agreements, the Company routinely agrees to indemnify and defend its customers against infringement of any patent, trademark, copyright, trade secrets, or other intellectual property rights arising from customers’ legal use of the Company’s products or services. The exposure to the Company under these indemnification provisions is generally limited to the total amount paid for the indemnified products. However, certain indemnification provisions potentially expose the Company to losses in excess of the aggregate amount received from the customer. To date, there have been no claims against the Company by its customers pertaining to such indemnification provisions, and no amounts have been recorded. The Company is currently not a party to any material legal proceedings.

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- Definition Tabular disclosure of undiscounted cash flows of lessee's operating lease liability. Includes, but is not limited to, reconciliation of undiscounted cash flows to operating lease liability recognized in statement of financial position. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Publisher FASB -URI https://asc.fasb.org//1943274/2147478964/842-20-50-6 + Details
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- Definition Tabular disclosure of arrangements in which the entity has agreed to procure goods or services from one or more suppliers. May include identification of the goods or services to be purchased, identity of the seller, pricing, effects on pricing for failing to reach minimum quantities required to be purchased (such as penalties), cancellation rights, and termination provisions. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 942 -SubTopic 210 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.9-03(17)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479853/942-210-S99-1 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 210 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(25)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480566/210-10-S99-1 + Details
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