Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Dec. 31, 2022
Leases [Abstract]  

6. 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. We used the U.S. Treasury rate of 0.33% at December 31, 2022.


The Company leases a warehouse facility, and the land which are located at 150 Commerce Street, Old Fort, North Carolina (the “Property”) from NC Limited Liability Company. The Company entered into the lease on October 7, 2022, the lease has a term of two years. The current base rent payment is $7,517 per month including property taxes, insurance, and common area maintenance. The lease required a $7,517 security deposit. The base rent will increase three percent (3%) on October 15, 2023.


At December 31, 2022 and 2021, supplemental balance sheet information related to leases were as follows:


  December 31,   December 31,
    2022   2021
Operating lease ROU asset   $ 162,069     $  


    December 31,   December 31,
    2022   2021
Operating lease liabilities:                
Current portion   $ 86,245     $  
Non-current portion     68,532        
Total   $ 154,777     $  


At December 31, 2022, future minimum lease payments under the non-cancelable operating leases are as follows:


Year Ending December 31,    
2023   $ 91,102  
2024     61,937  
Total lease payment   $ 153,039  
Less imputed interest      ( 5,778
Total     147,261  


The following summarizes other supplemental information about the Company’s operating lease:


    December 31,
Weighted average discount rate     4 %
Weighted average remaining lease term (years)     1.71