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LEASES

6 Months Ended

Jun. 30, 2023

NOTE 8 – LEASES

As of June 30, 2023, Titan maintains two leases classified as operating leases. Leases with an initial term of 12 months or less or leases that are immaterial are not included on the consolidated balance sheets.

Titan has a 62-month lease in Troy, Michigan which expires on January 15, 2025. The monthly payments were initiated on February 15, 2020 at $8,251 after a 2-month rent abatement period. Straight rent was calculated at $8,479 per month. The total remaining operating lease expenses through expected termination date on the lease are approximately $161,000.

On April 1, 2023, Titan entered into a 60-month lease in Detroit, Michigan, with a related party through common ownership, which expires on March 31, 2028. The lease has the option to renew for an additional 5 years given proper notice. The monthly payments were initiated on May 1, 2023 after a 1-month rent abatement period. Straight rent was calculated at $33,564 per month. The total remaining operating lease expenses expected through termination date on the lease are approximately $1,913,200. The supplemental cash flow impact of the right-of-use asset exchanged for new lease obligations was $1,635,335.

	June 30,			December 31,
	2023			2022
Weighted average remaining lease term (in years)		4.46			2.08
Weighted average discount rate		7.92	%		7.57	%

Future minimum lease payments required under operating leases on an undiscounted cash flow basis as of June 30, 2023 were as follows:

	For the Year Ended,
	December 31,
Remainder of 2023	$	229,096
2024		508,481
2025		421,498
2026		427,670
2027		443,707
Thereafter		112,968
Total minimum lease payments		2,143,420
Less: imputed interest		(356,532	)
Present value of future minimum lease payments		1,786,888

Current operating lease liabilities	$	349,651
Non-current operating lease liabilities	$	1,437,237

The Company had operating lease expenses of $152,333 and $50,745 for the six months ended June 30, 2023 and 2022, respectively, and $124,780 and $25,879 for the three months ended June 30, 2023 and 2022, respectively. The Company records operating lease expense as a component of general and administrative expenses on the statement of operations.