ROU Assets, Net and Operating Lease Liabilities

9 Months Ended

Sep. 30, 2025

ROU Assets, Net and Operating Lease Liabilities [Abstract]

ROU Assets, Net and Operating Lease Liabilities

6. ROU Assets, net and Operating Lease Liabilities

As of September 30, 2025 and December 31, 2024, the Company subsisted of the following non-cancellable lease contract.

Description of lease	Lease term
Office and warehouse at 19385-95 E. E Walnut Dr. N, City of Industry, CA 91748	10 years and 8 months from May 1, 2020 to December 31, 2030
Warehouse at 631 Omni Industrial Boulevard, Summerville Berkeley County, SC 29486	10 years and 1 month from September 1, 2022 to September 30, 2032
Warehouse at 10710 Bonnie View Rd. Lancaster, Texas 75241	5 years and 4 months from June 1, 2024 to September 30, 2029
Warehouse at Back Yard in 19301 E Walnut Dr. N, City of Industry, CA 91748	1 year from June 1, 2023 to May 31, 2024 1 year from June 1, 2024 to May 31, 2025 Monthly renewal from June 1, 2025

ASC 842-20 defines a short-term lease as a lease whose lease term, at commencement, is 12 months or less and that does not include a purchase option whose exercise is reasonably certain. The lease terms of the warehouse at Back Yard in 19301 E Walnut Dr. N, City of Industry, CA 91748 during the nine months ended September 30, 2025 and 2024 were 1-year fixed terms or monthly fixed terms without purchase options. These leases meet the definition of short-term leases. Pursuant to ASC 842, the Company elects not to recognize these leases on its balance sheet. Accordingly, this results in the recognition of the Company’s lease payments on a straight-line basis over the lease terms in a manner similar to how operating leases were accounted for under ASC 840. For the nine months ended September 30, 2025 and 2024, the short-term lease expenses were $81,000 and $81,000, respectively.

a)    Amounts recognized in the unaudited condensed consolidated balance sheets:

	As of
	September 30, 2025		December 31, 2024
	(Unaudited)		(Audited)
Right-of-use assets, net	$	16,902,166	$	18,693,425
Operating lease liabilities
Current	$	2,429,280	$	2,262,063
Non-current		15,663,464		17,505,755
	$	18,092,744	$	19,767,818
Weighted average remaining lease terms (in years)		5.42		6.16

b)    Information related to operating lease activities during the nine months ended September 30, 2025 and 2024 are as follows:

	For the Nine Months Ended September 30,
	2025		2024
	(Unaudited)		(Unaudited)
ROU assets obtained in exchange for operating lease liabilities	$	—	$	642,446
Amortization of ROU assets		1,791,259		1,680,032
Interest on operating lease liabilities		674,261		721,636
Total operating lease expenses	$	2,465,520	$	2,401,668

c)    The following table summarizes the remaining contractual maturities of lease liabilities, categorized by the years in which such lease liabilities are required to be settled, under operating leases as of September 30, 2025:

During the period ended September 30,
2026	$	3,234,496
2027		3,332,783
2028		3,434,067
2029		3,538,429
2030		3,463,449
2031		2,216,019
2032		1,832,055
Total future lease payments	$	21,051,298
Less: imputed interest		(2,958,554	)
Present value of lease obligations	$	18,092,744

The weighted-average discount rate used to determine the operating lease liabilities as of September 30, 2025 and December 31, 2024 were 5.83% and 5.83%, respectively.

The following table represents the minimum cash lease payments included in the measurement of lease liabilities for the nine months ended September 30, 2025 and 2024:

	For the Nine Months Ended September 30,
	2025		2024
	(Unaudited)		(Unaudited)
Cash paid for amounts included in the measurement of lease liabilities:
Cash outflows for operating leases	$	2,349,335	$	2,170,117