NOTE 5 - OPERATING LEASES

12 Months Ended

Dec. 31, 2024

Notes

NOTE 5 - OPERATING LEASES

NOTE 5 – OPERATING LEASE

The Company’s lease consists of an operating lease for general office space and warehouse facilities. The Company recognizes rent expense for this lease on a straight-line basis over the lease term. Because the lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the lease Commencement Date in determining the present value of future lease payments.

On June 3, 2021, the Company entered into a lease for the premises located at 1345 Specialty Drive #E, Vista, CA, containing approximately 11,751 square feet of rentable area. The lease commenced on July 1, 2021, and expires on June 30, 2026. The monthly base rent under the lease is $9,988 per month and monthly operating expenses during the term of the lease, subject to adjustment under the lease, are $1,175 per month. On Commencement Date, the Company recognized a ROU asset of $653,701 and a lease liability of $652,350.

During the year ended December 31, 2024, cash paid for amounts included in the measurement of operating lease liabilities was $131,868 and the Company recorded operating lease expenses included in operating expenses of $43,038 and cost of sales of $106,124, for a total of $149,162.

Supplemental balance sheet information related to leases as of December 31, 2024 was as follows:

Operating leases:
Operating lease right-of-use-assets	212,504
Operating lease liabilities - current	167,461
Operating lease liabilities – long-term	86,878
Incremental borrowing rate:
Operating leases	4.94%

As of December 31, 2024, maturities of operating lease liabilities were as follows:

Years ending December 31,
2025		176,268
Thereafter		88,134
Total lease payments		264,402
Less: Imputed interest		(10,063)
Total lease liability		254,339
Less: current lease liability		(167,461)
Long-term lease liability	$	86,878