11.

Leases

As of June 30, 2022, the Company is a party to nine operating leases. Four of these leases are office or warehouse leases; the remaining five are equipment leases (see Note 9). As disclosed in Note 2, the Company accounts for leases as required by ASC Topic 842. The Company has elected to apply the short-term lease exception to all leases of one year or less. As of June 30, 2022, this exception applies to the six EVTDS leases and to the ADOMANI Inc. Stockton, California lease, which are all

month-to-month.

In applying the guidance in ASC 842, the Company has determined that all current leases should be classified as operating leases.

The Company has entered into the SRI Equipment Leases (see Note 8). Rent expense under the SRI Equipment Leases for the three and six months ended June 30, 2022 was $23,312 and $46,624, respectively, and for the three and six months ended June 30, 2021 was $23,313 and $42,745, respectively.

The Company has entered into the SRI Office Lease (see Note 8). Rent expense under the SRI Office Lease for the three and six months ended June 30, 2022 was $7,280 and $10,010, respectively, and for the three and six months ended June 30, 2021 was $2,730 and $5,460, respectively.

The Company has entered into the ABCI Office Lease (see Note 8). Rent expense under the ABCI Office Lease for the three and six months ended June 30, 2022 was $8,400 and $16,800, respectively, and for the three and six months ended June 30, 2021 was $8,400 and $16,800, respectively.

The Company has entered into the Toledo Jet Center Lease for office space in the Ft. Lauderdale Florida area

effective

February 15, 2022. The lease has a

one

year term with the option to renew after one year. Rent expense for the Toledo Jet Center Lease for the three and six months ended June 30, 2022 was $4,815 and $7,223, respectively.

In February 2017, ADOMANI, Inc. signed a lease for storage space in Stockton, California to serve as a location to store vehicles and other equipment utilized for marketing and trade-show purposes. The lease is on a

month-to-month

basis and can be terminated by either party with

30-days’

notice. The total amount due monthly is $1,000.

In December 2019, ADOMANI, Inc. signed a lease for combined office space and warehouse location in Corona, California. The facility had been used to conduct research and development activity, stage materials, assemble and/or manufacture vehicles, perform

pre-delivery

inspections, test demo vehicles, and securely store vehicles, equipment, parts and finished goods vehicle inventories prior to November 2020 when ADOMANI, Inc. vacated its former corporate office space in Corona, California, and made such facility the new corporate office location in addition to its prior use. The lease was for a period of 36 months, commencing on January 1, 2020, and terminating on December 31, 2022. The base rent for the term of the lease was $495,720, with $265 due per month for fire sprinkler alarm monitoring and landscape maintenance. The base rent amount due monthly was $13,108 at commencement and would have escalate to $13,906 by its conclusion. However, the Company vacated the premises effective March 31. 2022, and the lease was taken over on April 1, 2022 by its sublease tenant, as discussed below.

On February 4, 2020, ADOMANI, Inc. signed a sublease agreement with Masters Transportation, Inc. (“Masters”) for Masters to occupy a portion of the Corona, California, facility that the Company occupied effective January 1, 2020 (see above). The effective date of the Masters’ sublease was February 1, 2020, and it expires when the Company’s lease on the Corona, California facility expires on December 31, 2022. Under the sublease, Masters is obligated to pay the Company monthly rent payments in an amount equal to $6,000 at commencement and thereafter escalating to $6,365 by its conclusion. On April 1, 2022 Masters took over the remaining lease obligation for the facility.

The Company’s total net rent expense for the three and six months ended June 30, 2022 was $55,118 and $128,167, respectively, and for the three and six months ended June 30, 2021 was $132,949 and $190,796, respectively.

Quantitative information regarding the Company’s leases is as follows:


	Six Months Ended June 30,
	2022			2021
Lease expenses
Operating lease expenses	$	50,371		$	29,487
Short-term lease expenses		77,796			183,515

Total lease cost	$	128,167		$	213,002

Other information
Cash paid for the amounts included in the measurement of lease liabilities for operating leases:
Operating cash flows	$	51,160		$	27,906
Weighted-average remaining lease term (in years):
Operating leases		0.80			1.56
Weighted-average discount rate:
Operating leases		14	%		14	%