VirTra, Inc Leases Disclosure

Note 6. Leases

 

On June 1, 2022, we entered into a new lease of approximately 9,350 square feet located at 12301 Challenger Parkway, Orlando, Florida, from an unaffiliate third party through May 2027.

 

The Company’s lease agreements do not contain any residual value guarantees, restrictive covenants or variable lease payments. The Company has not entered into any financing leases.

 

In addition to base rent, the Company’s lease generally provides for additional payments for other charges, such as rental tax. The lease includes fixed rent escalations. The Company’s lease does not include an option to renew.

 

The Company determines if an arrangement is a lease at inception. Operating leases are recorded in operating lease right of use assets, net, operating lease liability – short-term, and operating lease liability – long-term on its balance sheets.

 

 

Operating lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s lease does not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate used at adoption was 4.5%. Significant judgement is required when determining the Company’s incremental borrowing rate. The Company uses the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

 

Effective June 1, 2022, the Company obtained a right-of-use asset in exchange for a new operating lease liability in the amount of $840,855. Effective January 1, 2019, the Company obtained a right-of-use asset in exchange for a new operating lease liability in the amount of $1,721,380 and derecognized $46,523 deferred rent for an adjusted operating lease right-of-use asset in the net amount of $1,674,857.

 Schedule of Balance Sheet Classification of Lease Assets and Liabilities

Balance Sheet Classification		December 31, 2025				December 31, 2024
Assets
Operating lease right-of-use assets, December 31, 2024		$	437,095			$	716,687
Operating lease right-of-use assets		$	437,095			$	716,687
Amortization for the twelve months ended December 31, 2025			(168,222	)			(279,592	)
Amortization			(168,222	)			(279,592	)
Total operating lease right-of-use asset, December 31, 2025		$	268,873			$	437,095
Total operating lease right-of-use asset		$	268,873			$	437,095
Liabilities
Current
Operating lease liability, short-term		$	196,311			$	192,410
Non-current
Operating lease liability, long-term			89,053				265,111
Total lease liabilities		$	285,364			$	457,521

 

Future minimum lease payments as of December 31, 2025, under non-cancellable operating leases are as follows:

 Schedule of Future Minimum Lease Payments

2026		$	196,311
2027			99,382
Total Lease Payments			295,693
Less: imputed interest			(10,329	)
Operating Lease Liability		$	285,364

 

The Company had a deferred rent liability of $0 on December 31, 2025, and 2024, relative to the increasing future minimum lease payments. Rent expenses for the years ended December 31, 2025, and 2024 were $193,655 and $497,393, respectively. As VirTra only has one lease agreement the weighted average remaining lease term is 1.5 years and the average discount rate of that lease is 4.5%