Leases

3 Months Ended

Mar. 31, 2025

Leases

Leases

Note 10. Leases

The Company conducts its operations in leased facilities under a non-cancelable operating lease expiring on May 31, 2025.

The Company entered into a second amendment to the operating lease agreement, relating to the leased facilities.  The second amendment provides for an extension term to December 31, 2027, and for monthly rent payments of, initially, $7,147.00, escalating annually by 3.5%. The second amendment was signed on March 21, 2025 but is not effective until June 1, 2025. As such, no adjustments have been made to the condensed financial statements. The Company will account for the lease modification in the second quarter 2025 in accordance with ASC 842.

Other than as set forth above, the terms of the Lease Agreement remain unchanged.

The Company has capitalized the present value of the minimum lease payments commencing May 1, 2024, using an estimated incremental borrowing rate of 6.5%. The minimum lease payments do not include common area annual expenses which are considered to be non-lease components.

As of March 31, 2025 and December 31, 2024, the operating lease asset amounted to $13,100 and $32,400, respectively, and operating lease liability amounted to $14,200 and $35,200, respectively.

There are no other material operating leases. The Company has elected not to recognize right-of-use assets and lease liabilities arising from short-term leases.

Total operating lease costs were $19,800 and $13,300 for the three months ended March 31, 2025 and 2024, respectively.

Undiscounted future minimum lease payments as of March 31, 2025, by year and in aggregate are as follows:

	Operating Leases
Year ending December 31
2025	$	14,300
Total lease payments		14,300
Less imputed interest		(100	)
Total	$	14,200