Quarterly report [Sections 13 or 15(d)]

Leases

v3.25.1
Leases
3 Months Ended
Mar. 31, 2025
Leases  
Leases

4. Leases

 

Operating right of use (“ROU”) assets and operating lease liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating right of use assets represent the Company’s right to use an underlying asset and is based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates incremental secured borrowing rates corresponding to the maturities of the leases.

 

The Company’s office lease contains rent escalations over the lease term. The Company recognizes expense for this office lease on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term.

 

The Company leases its office and warehouse facilities, and the land which are located at 3101 S US-1, Fort Pierce, Florida (the “Property”) from Visconti Holdings, LLC. Visconti Holdings, LLC is a single member LLC that holds the ownership of the property, and its sole member is Joseph C. Visconti, the CEO of the Company. The Company entered into the lease on January 1, 2020, and as amended January 1, 2021, the lease has a term of five years. The current base rent payment is $36,465 per month including property taxes and the lease required a $25,000 security deposit.

 

At March 31, 2025 and December 31, 2024, supplemental balance sheet information related to the lease was as follows:

 

       
    March 31,   December 31,
    2025   2024
Operating lease ROU asset   $ 293,162     $ 390,686  

 

    March 31,   December 31,
    2025   2024
Operating lease liabilities:                
Current portion   $ 327,693     $ 436,730  
Non-current portion            
Total   $ 327,693     $ 436,730  

 

At March 31, 2025, future minimum lease payments under the non-cancelable operating lease are as follows:

 

       
Year Ending December 31,    
2025 (excluding the three months ended March 31, 2025)     328,187  
         
Total lease payments     328,187  
Less imputed interest     (494 )
Total   $ 327,693  

 

   
    March 31,
    2025
Weighted average discount rate     0.36 %
Weighted average remaining lease term (years)     0.67