NOTE 9. Leases
On May 6, 2024, the Company entered into a lease
to lease its operating and office facility under a non-cancelable real property lease agreement that expired on May 31, 2026. The real
property lease contains provisions requiring payment of property taxes, utilities, insurance, maintenance and other occupancy costs applicable
to the leased premise. As the Company’s leases do not provide implicit discount rates, the Company uses an incremental borrowing
rate based on the information available at the commencement date in determining the present value of lease payments.
The components of lease expense were as follows:
| Schedule of lease expense | |
| |
|
| | |
For the
Three Months Ended June 30, 2026 | |
For the
Six Months Ended June 30, 2026 |
| Operating lease cost | |
$ | 24,806 | | |
$ | 42,190 | |
| Total net lease cost | |
$ | 24,806 | | |
$ | 42,190 | |
Supplemental balance sheet information related
to leases was as follows:
| Schedule of supplemental balance sheet information | |
| | |
| | |
For the
Six Months Ended
June 30, 2026 |
| Operating leases: | |
| | |
| Operating lease assets | |
$ | 85,454 | |
| | |
| | |
| Current portion of operating lease liabilities | |
| 90,693 | |
| Noncurrent operating lease liabilities | |
| – | |
| Total operating lease liabilities | |
$ | 90,693 | |
| | |
| | |
| Weighted average remaining lease term: | |
| | |
| Operating leases | |
| 0.93 years | |
| | |
| | |
| Weighted average discount rate: | |
| | |
| Operating leases | |
| 7.9% | |
Supplemental cash flow and other information related
to leases was as follows:
| Schedule of supplemental cash flow information | |
| | |
| | |
For the |
| | |
Six Months Ended |
| | |
June 30, 2026 |
| Cash paid for amounts included in the measurement of lease liabilities: | |
| | |
| Operating cash flows used for operating leases | |
$ | – | |
| Financing cash flows used for finance leases | |
$ | – | |
| | |
| | |
| Leased assets obtained in exchange for lease liabilities: | |
| | |
| Total operating lease liabilities | |
$ | 119,961 | |
| Total finance lease liabilities | |
$ | – | |
The following is a maturity analysis of the annual undiscounted cash
flows of the operating lease liabilities on a fiscal year basis, including common area maintenance fees, under non-cancelable operating
leases as of June 30, 2026:
| Schedule of maturity analysis operating
leases | |
|
| Fiscal Year Ending | |
Minimum Lease |
| December 31, | |
Commitments |
| 2026 (6 months) | |
$ | 33,445 | |
| 2027 | |
| 61,841 | |
| 2028 | |
| – | |
| 2029 | |
| – | |
| 2030 | |
| – | |
| Total future undiscounted lease payments | |
| 95,286 | |
| Less interest | |
| (4,593 | ) |
| Present value of lease payments | |
| 90,693 | |
| Less current portion | |
| 90,693 | |
| Long-term operating lease liabilities | |
$ | – | |
|