Leases |
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| Leases | 8. Leases
The Company’s leases are comprised of operating leases for office space. At the inception of the lease, the Company determines whether the lease contract conveys the right to control the use of identified property for a period of time in exchange for consideration. Leases are classified as operating or finance leases at the commencement date of the lease. Operating leases are recorded as operating lease right-of-use assets, other current liabilities, and operating lease liabilities in the Condensed Balance Sheets. The Company did not have any finance leases at March 31, 2026 and December 31, 2025.
The Company has two leases consisting of office space in Batesville and Carmel, Indiana. The lease in Batesville, Indiana commenced on August 1, 2025, and has an initial term of three years, with automatic one-year renewals subject to an annual 4% rent escalation, unless 60-day notice of vacating is given. On May 19, 2025, the Company terminated its prior lease in Versailles, Indiana, with a monthly lease payment of $1,800, effective July 31, 2025, without penalty due to relocation of the office space to Batesville, Indiana, with the same landlord. The current monthly lease payment is $2,000 with no escalations during the initial lease term. On June 13, 2025, the Company prepaid $25,200 towards the monthly lease payments which will be amortized over the initial lease term. The lease in Carmel, Indiana commenced January 1, 2024, with an initial term of five years and five months. The monthly lease payment started at $6,721 with an annual increase of 2.5%. The Company was only obligated to pay an amount equal to 50% of the monthly base rent for the first 10 months of the term.
The Company recognized operating lease expense of $26,116 and $25,523 for the three months ended March 31, 2026 and 2025, respectively, including short-term lease expense and variable lease costs.
The following table presents information related to the Company’s operating leases:
As of March 31, 2026, the maturities of the Company’s operating lease liabilities were as follows:
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