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OPERATING LEASES | 9 Months Ended
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Sep. 30, 2024
Leases [Abstract] |
OPERATING LEASES | NOTE 9 – OPERATING LEASES At the time of this filing, the Company has operating lease agreements for offices in Florida and Hong Kong. The Company entered into an operating lease agreement, effective October 1, 2017, for our corporate headquarters located in Fort Lauderdale, Florida where we lease approximately 6,500 square feet of office space which expired on March 31, 2024. On February 22, 2024, the Company executed a lease extension for 14 months effective April 1, 2024, and expires on May 31, 2025. The base rent on the extension is approximately $10,000 per month subject to a 3% annual adjustment. The Company entered into an operating lease on August 23, 2023, for approximately 10,000 square feet of ground floor retail space and a portion of the basement underneath the ground floor retail space. During the nine months ended September 30, 2024, the Company abandoned its plans to continue use of the leased space. On September 25, 2024, the Company entered into a Settlement Agreement for a full release and termination of the Lease Agreement in exchange for Company’s payment of $250,000. (See Note 2). Supplemental balance sheet information related to leases as of September 30, 2024 and December 31, 2023 is as follows: SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES
Assets: |  | September 30, 2024 |  |  | December 31, 2023 |
Operating lease - right-of-use assets |  | $ | 137,000 |  |  | $ | 3,926,000 |
Liabilities |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |
Current portion of operating leases |  | $ | 135,000 |  |  | $ | 84,000 |
Operating lease liabilities, net of current portion |  | $ | - |  |  | $ | 3,925,000 |
Supplemental statement of operations information related to operating leases is as follows: SCHEDULE OF LEASE TERM AND DISCOUNT RATE
|  | Three Months Ended September 30, 2024 |  |  | Three Months Ended September 30, 2023 |  |  | Nine Months Ended September 30, 2024 |  |  | Nine Months Ended September 30, 2023 |
Operating lease expense as a component of general and administrative expenses |  | $ | 45,000 |  |  | $ | 279,000 |  |  | $ | 444,000 |  |  | $ | 762,000 |
Supplemental cash flow information related to operating leases is as follows: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating cash flow paid for operating leases |  | $ | 45,000 |  |  | $ | 363,000 |  |  | $ | 136,000 |  |  | $ | 868,000 |
Lease term and Discount Rate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted average remaining lease term (years) |  |  | 0.8 |  |  |  | 15.1 |  |  |  |  |  |  |  |  |
Weighted average discount rate |  |  | 9.0 | % |  |  | 12.0 | % |  |  |  |  |  |  |  |
ALGORHYTHM HOLDINGS, INC. and SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2024 and 2023 (Unaudited) Minimum future payments under all operating leases as of September 30, 2024, are as follows: SCHEDULE OF OPERATING LEASE MINIMUM FUTURE PAYMENTS
Payments due by period |  | Amount |
2024 (remaining six months) |  | $ | 46,000 |
2025 |  |  | 94,000 |
Total minimum future payments |  |  | 140,000 |
Less: Interest |  |  | 5,000 |
Total operating lease liabilities |  | $ | 135,000 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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