LEASES

3 Months Ended

Mar. 31, 2023

LEASES

LEASES

11. LEASES

Effective February 9, 2022, TopPop executed a lease agreement to rent approximately 82,000 square feet of warehouse space in Pennsauken, NJ. The lease provided a lease term of 74 months (the first two months are rent free) commencing upon February 9, 2022 and terminating on March 31, 2028. The lease provided a security deposit to the landlord of $92,250 Per the lease agreement, TopPop was also required to post an additional deposit of $184,500. On May 31, 2022, TopPop sent the deposit to an escrow account held by the landlord’s counsel.

At March 31, 2023, the future undiscounted minimum lease payments under the noncancellable leases are as follows:  

	As of March 31, 2023
Remainder of the year ending December 31, 2023	$	879,348
Year ending December 31, 2024		1,201,600
Year ending December 31, 2025		1,235,886
Year ending December 31, 2026		1,271,201
Year ending December 31, 2027		1,248,889
Year ending December 31, 2028		325,461
Thereafter		1,099,614
Total undiscounted finance lease payments	$	7,261,999
Less: Imputed interest		1,989,622
Present value of finance lease liabilities	$	5,272,377

The operating lease liabilities of $5,272,377 and $5,426,948 as of March 31, 2023 and December 31, 2022, respectively, represent the discounted (at a 10% estimated incremental borrowing rate) value of the future lease payments at March 31, 2023 and December 31, 2022. The Company’s weighted-average remaining lease term relating to its operating leases is 4.89 years.

For the three months ended March 31, 2023 and 2022, occupancy expense attributed to these leases were $320,801 and $450,138, respectively.