NOTE 9 – OPERATING LEASES

 

The Company have operating leases for office space, vehicles, office equipment and laboratory equipment. The Company’s leases have remaining lease terms of less than 0.25 years to 5.00 years.

The components of lease expense were as follows:

 

   Years ended 
   December 31, 
   2025   2024 
Operating lease cost  $416,943   $430,194 

 

Supplemental information related to leases was as follows:

 

   December 31,   December 31, 
   2025   2024 
Right-of-use assets  $1,277,356   $1,098,074 
           
Operating lease liabilities - current portion  $356,126   $264,982 
Operating lease liabilities – non-current portion  $992,480   $945,203 

 

   Years ended 
   December 31, 
   2025   2024 
Cash paid for operating cash flows from operating leases  $416,634   $408,955 
Right-of-use asset obtained in exchange for new operating lease liabilities  $312,021   $48,272 
           
Weighted-average remaining lease term - operating leases (year)   4.06    4.54 
Weighted-average discount rate — operating leases   9.13%   9.81%

 

The following table outlines the maturities of the Company’s operating lease liabilities as of December 31, 2025:

 

Year ending December 31,    
2026  $464,504 
2027   361,651 
2028   351,303 
2029   234,760 
2030   202,145 
Thereafter   12,250 
Total lease payments   1,626,613 
Less: Imputed interest   (278,007)
Operating lease liabilities  $1,348,606 

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.