7. Leases. On August 12, 2022, the Company entered into a Purchase and Sale Agreement (the “PSA”) with Frontenac Properties LLC (the “Purchaser”) pursuant to which the Company agreed, subject to the terms and conditions of the PSA, to sell its facility in Naperville, Illinois, in which the Company’s headquarters and warehouse space are located, to the Purchaser. On September 27, 2022, the Company’s sale of the facility to the Purchaser was completed. Concurrently with the completion of the sale of the Naperville facility, the Company and the Purchaser entered into a lease agreement pursuant to which the Company leased the office and warehouse portion of the Naperville facility from the Purchaser until December 31, 2022 and the office portion until June 30, 2023. The monthly rent payable by the Company under the lease was $12,500 for the period from the closing until December 31, 2022 and was $8,500 for the period from January 1, 2023 to June 30, 2023. For the period from July 1, 2023 through December 31, 2023 the lease was extended on a month to month basis at $8,500 per month. Subsequently, for the period from January 1, 2024 to December 31, 2024 the lease was extended on a month to month basis at $9,400 per month. The Company adopted the practical expedient for short-term leases under ASC 842 which allows for leases of 12 months or less to be expensed on a straight-line basis over the lease term without reporting on the balance sheet.

The Company recorded rent expense aggregating approximately $112,800 and $128,000 in 2024 and 2023, respectively.

On November 30, 2024, the Company entered into a lease agreement with Juneau-Bell, LLC for new office space located at 27755 Diehl Road, Suite 200, Warrenville, IL 60555, which will constitute the Company's new headquarters. The lease commencement date is March 1, 2025. A security deposit of $43,970 and the first month’s base rent of $8,365 were paid at signing. These amounts were recorded as Deposits with Vendors and Other Current Assets, respectively, in the Consolidated Balance Sheets. In addition to base rent, the Company will pay for common area maintenance expenses. The lease term is for 66 months with one option to renew for an additional 60 months. The Company classified the agreement as an operating lease under ASC 842 Leases. On the expected commencement date of March 1, 2025, the Company will recognize a right-of-use asset of $435,149 and a corresponding long-term lease liability of $426,787.

As of December 31, 2024, the expected annual minimum lease payments of the Company’s operating lease liability were as follows:


Fiscal Year	Operating Lease
20251	$33,458
2026	$103,417
2027	$107,067
2028	$110,717


2029	$114,367
Thereafter	$78,474
Total undiscounted minimum lease payments	$547,500
Less: Present value discount	$120,713
Lease Liability	$426,787

1. Includes base rent abatement for a period of six months.