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Leases

3 Months Ended

Mar. 31, 2025

6. Leases

The Company’s leases consist principally of leases for office and warehouse space. For leases with terms greater than twelve months, the related asset and obligation are recorded at the present value of the lease payments over the term. Many of these leases contain rental escalation clauses which are factored into the determination of the lease payments when appropriate. When available, the lease payments are discounted using the rate implicit in the lease; however, the Company’s current leases do not provide a readily determinable implicit rate. Therefore, the Company’s incremental borrowing rate is estimated to discount the lease payments based on information available at the lease commencement.

These leases contain both lease and non-lease components, which the Company has elected to treat as a single lease component. The Company elected not to recognize leases that have an original lease term, including reasonably certain renewal or purchase obligations, of twelve months or less in its condensed consolidated balance sheets for all classes of underlying assets. Lease costs for such short-term leases are expensed on a straight-line basis over the lease term.

All lease assets denominated in a foreign currency are measured using the exchange rate at the commencement of the lease. All lease liabilities denominated in a foreign currency are remeasured using the exchange rate as of the condensed consolidated balance sheet date.

Lease assets and liabilities

The following table presents the lease-related assets and liabilities and their respective classification on the condensed consolidated balance sheets:


	March 31,		December 31,
	2025		2024
ASSETS
Current
Prepaid expenses and other current assets	$	27,984	$	41,801
Noncurrent
Operating lease right-of-use assets		3,050,106		3,190,985
Total lease right-of-use assets	$	3,078,090	$	3,232,786

LIABILITIES
Current
Current maturities of operating leases	$	636,075	$	634,947
Noncurrent
Noncurrent operating leases		2,473,687		2,630,812
Total lease liabilities	$	3,109,762	$	3,265,759

Weighted average remaining lease term:
Operating leases		4.8 years		5.0 years

Weighted average discount rate:
Operating leases		6.56%		6.56%

The components of lease costs were as follows:


	Three Months Ended March 31,
	2025		2024
Operating lease costs	$	207,555	$	205,872
Short-term lease costs		99,025		69,709
Lease costs - discontinued operations		2,697		12,120
Total lease costs	$	309,277	$	287,701

Supplemental cash flow information related to leases is as follows:

Future lease payments relating to the Company’s operating lease liabilities from continuing operations as of March 31, 2025 were as follows:


Years ending December 31,	Total
2025	$	626,130
2026		763,783
2027		732,904
2028		749,143
2029		455,209
Thereafter		314,007
Total future lease payments		3,641,176
Less: imputed interest		(531,414)
Total lease obligations		3,109,762
Less: current obligations		(636,075)
Noncurrent lease obligations	$	2,473,687

Three Months Ended March 31,

Cash paid for amounts included in measurement of liabilities:

Operating cash outflows for operating leases

Operating cash outflows for operating leases - discontinued operations