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| LEASES | NOTE 14 - LEASES
The Company has entered into a lease agreement with Tower Lake LLC for office space. The Company has not recognized any right-of-use asset or lease liability pursuant to this lease as it is a short-term lease. The Company recorded rent expense of $7,811 for the three months ended June 30, 2026 and 2025 and $15,621 for the six months ended June 30, 2026, and 2025, in the unaudited condensed consolidated statements of operations.
In February 2026, the Company entered into a two-year sublease agreement expiring on February 29, 2028, with Chesmar Homes, LLC for office space located in Houston, Texas. The monthly base rent under the agreement is $8,761 and the Company paid a security deposit of $17,523 upon execution of the sublease agreement, 50% of which will be adjusted against the final lease payment. The lease was contractually scheduled to commence on March 1, 2026. However, as the Company obtained control of the underlying asset, including physical possession, on May 1, 2026, the lease commenced on May 1, 2026, under ASC 842, “Leases”. The Company recognized a right-of-use asset and corresponding lease liability of $173,254 as of May 1, 2026.
The Company incurred operating lease cost of $17,524 for the three and six months ended June 30, 2026. Cash paid for amounts included in the measurement of operating lease liabilities was $17,524 for both the three and six months ended June 30, 2026, and is classified within operating activities in the condensed consolidated statement of cash flows. The weighted average remaining term of operating leases was 1.67 years as of June 30, 2026, and the weighted-average discount rate used to measure the present value of the operating lease liabilities was 12.5% as of May 1, 2026.
As of June 30, 2026, the operating lease right-of-use asset was $157,444, and the operating lease liability of $157,444 was classified as $90,527 current and $66,917 non-current in the unaudited condensed consolidated balance sheet.
Future operating lease payments as of June 30, 2026, were as follows:
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