LEASES

6 Months Ended

Jun. 30, 2025

Leases

LEASES

NOTE 5 – LEASES

In March 2022 we entered into a three-year lease agreement commencing April 15, 2022 and continuing through April 30, 2025. In April 2025 we extended the lease for two additional years commencing May 1, 2025 and continuing through April 30, 2027. The annual rate for the initial lease year is 70,785 with installment payments of $5,555 in May 2025 and $5,930 each month thereafter. Annual increases are tied to the U.S. Consumer Price Index of the Bureau of Labor Statistics of the Department of Labor for all Urban Consumers for San Francisco-Oakland-San Jose area.

We account for our leases under ASC 842, Leases, which requires all leases to be reported on the balance sheet as right-of-use assets and lease obligations. We elected the expedients permitted under the transition guidance that retained lease classification and initial direct costs for any leases that existed prior to adoption of the standard.

We categorized leases with terms longer than twelve months as either operating or finance. Finance leases are generally those leases that would allow us to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in property and equipment, net. All other leases are categorized as operating leases. We did not have any finance leases as of June 30, 2025. Our lease for property is for two years. We elected the accounting policy to include both the lease and non-lease components of our agreements as a single component and account for them as a lease.

Lease liabilities are recognized at the present value of the fixed lease payments using a discount rate based on similarly secured borrowings available to us. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the lease. Lease assets are tested for impairment in the same manner as long-lived assets used in operations. Leasehold improvements are capitalized at cost over the lesser of their expected useful life or the lease term.

When we have options to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is reasonably certain that we will exercise the option, we consider these options in determining the classification and measurement of the lease. Costs associated with the operating lease are recognized on a straight-line basis within operating expenses over the term of the lease.

The following table presents the lease-related asset and liability recorded on the balance sheets:

	June 30, 2025
Assets
Operating lease asset	$	121,252
Liabilities
Current
Operating lease liabilities	$	64,005
Noncurrent
Operating lease liabilities	$	57,247

Supplemental cash flow information related to leases was as follows:

	Six Months Ended June 30, 2025
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	33,464

The table below presents the remaining lease terms and discount rates for operating lease:

	June 30, 2025
Weighted-average remaining lease term
Operating lease		1.8 years
Weighted-average discount rate
Operating lease		7.75	%

Maturities of lease liabilities as of June 30, 2025, were as follows:

		Operating Lease
2025 (6 months remaining)		35,580
2026		71,160
Thereafter		23,720
Total lease payments		130,460
Less: amount of lease payments representing interest		(9,208	)
Present value future minimum lease payments	$	121,252
Less: current obligations under lease	$	(64,005	)
Non-current obligations	$	57,247