v3.26.1
Leases
 6 Months Ended
Jun. 30, 2026
Leases  
Leases

Note 9. Leases

 

Operating lease

 

We have a new lease contract entered April 28, 2026 which includes our office facility that commenced on May 1, 2026 and expires on April 30, 2031. The monthly “Base Rent” is $10,913. The Company pays 50% of Base rent for the first 3 months. The Base Rent is increased by 4.0% each year starting in year 3.

 

We have a lease contract entered June 1, 2025 which includes both our office facility and warehouse space that expires May 31, 2028. The monthly “Base Rent” is $12,232 and $13,150. The Base Rent is increased by 3.0% each year. We had a lease contract entered June 1, 2024 which includes both our office facility and warehouse space that expired May 31, 2025. The monthly “Base Rent” was $11,876 and $12,767.

 

We recognized total lease expense, primarily related to our operating leases, on a straight-line basis in accordance with ASC 842.

 

As of June 30, 2026 and December 31, 2025, the Company recorded a refundable security deposit of $10,000 for its warehouse space and is included in other assets on the balance sheet.

 

The operating lease expense were as follows:

  

             
   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2026   2025   2026   2025 
Lease cost                    
Operating lease cost  $141,347   $103,345   $254,550   $204,787 

 

Supplemental balance sheet information related to operating leases was as follows:

  

       
  

Six months ended

June 30,

 
   2026   2025 
Other information          
Cash paid for operating cash flows from operating leases  $163,969   $148,598 
Right-of-use assets obtained in exchange for new operating lease liability  $578,769   $856,787 
           
Weighted-average remaining lease term — operating leases (year)   3.38    2.92 
Weighted-average discount rate — operating leases   6.18%   6.50%

 

Future minimum lease payments under operating leases that have initial noncancelable lease terms in excess of one year as of June 30, 2026, were as follows:

  

   Total 
Year Ended December 31,     
2026  $216,885 
2027   450,174 
2028   269,090 
2029   139,826 
2030   145,419 
Thereafter   49,103 
Total future minimum lease payments   1,270,497 
Less: Imputed interest   (121,458)
Operating lease liabilities  $1,149,039 

 

 

Sublease – related party

 

On August 1, 2021, the Company entered into a Sublease Agreement with its related party, CTC (“Sublandlord”), whereby the Company shall sublease certain offices, rooms and shared use of common spaces located at 150 Sykes Creek Parkway, Merritt Island, FL. The sublease agreement is a month-to-month lease and may be terminated with 30 days’ notice to the Sublandlord. The monthly rent shall be $4,570 from inception through January 31, 2022, $4,707 from February 1, 2022 to January 31, 2023 and $4,847 from February 1, 2023 to January 31, 2024. On February 1, 2024, the Company extended the month-to-month Sublease agreement. The monthly rent shall be $4,618.03 from February 1, 2024 to January 31, 2025, $4,756.57 from February 1, 2025 to January 31,2026 and $4,899.27 from February 1, 2026 to January 31, 2027. A common area maintenance fee (CAM) will be charged in addition to the monthly rent. During the three and six months ended June 30, 2026 and 2025, the Company recorded sublease expenses as follows.

   

             
   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2026   2025   2026   2025 
Sub lease expense  $32,448   $20,653   $65,867   $41,163