6. LEASES

The Company has operating leases that primarily relate to operating facilities in both the United States and Germany. The Company leases its operating facilities under operating lease arrangements with varying expiration dates through March 2037. As of December 31, 2024, the remaining lease term of the Company’s operating leases ranges from six to twelve years.

Supplemental statement of operations and cash flows related to operating leases is as follows:

For the year ended December 31,

    

2024

    

2023

Cash paid in connection with operating leases

$

1,683,461

$

2,403,025

Operating lease expense

$

2,234,616

$

1,802,490

Supplemental balance sheet information related to operating leases is as follows:

    

December 31, 

 

    

2024

    

2023

Right-of-use asset

$

11,511,236

$

12,058,896

Lease liability – current portion

$

452,688

373,636

Lease liability – net of current portion

 

12,443,971

12,896,659

Total lease liability

$

12,896,659

$

13,270,295

Weighted average discount rate

9.8

%

9.8

%

Weighted average remaining lease term

11.7 years

12.7 years

As of December 31, 2024, the maturities of the lease liabilities are as follows:

2025

    

$

1,695,676

2026

 

1,735,747

2027

 

1,776,920

2028

 

1,819,224

2029

 

1,862,893

Thereafter

 

13,550,383

Future operating lease payments

22,440,843

Imputed interest

(9,544,184)

Total lease liability

$

12,896,659

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About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.