Leases |
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Dec. 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| LEASES | 10. LEASES
Operating Leases
On May 18, 2023, the Company entered a 36-month lease with Stason Industrial Corporation for a facility including warehouse and office in the City of Irvine, California, with a security deposit of $50,000, effective on September 1, 2023. The monthly rent is approximately $47,100 with a 3% increase each year. On February 29, 2024 the Management moved out from the facilities and decided to seek early termination of this lease. The $50,000 security deposit was not returned to the Company and the negotiation of early termination is still ongoing as of the reporting date. During 2024, the Company recorded the full impairment of ROU asset of $1.05 million and kept $1.50 million lease liabilities associated with this lease in the Company’s consolidated financial statements due to uncertainty of the negotiation result with the landlord. The Company recently received a formal summons regarding a breach of contract lawsuit filed by the landlord. See Note 14 – Commitments and Contingencies for further information regarding this litigation.
On March 3, 2025, the Company entered a 12-month lease with THE PROPITIOUS IRVINE LLC for office space located in Irvine, California, commencing on June 1, 2025. The lease requires monthly rental payments of $3,000.
The components of lease costs for continuing operations, lease term and discount rate with respect of warehouse and office lease with an initial term of more than 12 months are as follows:
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