NOTE 10—LEASES

Operating leases — During the years ended December 31, 2023 and 2022, the Company leased its office space under operating leases with unrelated entities.

The Company leased 21,293 square feet of office space for its headquarters in Torrance, California, at a base rental of $86,828 per month, which lease will expire on September 30, 2026. In addition, the Company leases 2,326 square feet of office space in Dubai, United Arab Emirates. Upon expiration of the lease in June 2023, the Company extended the original lease and also expanded the office space, both leases will expire on June 19, 2026. The Company recognized total of $189,000 lease liability and the right of use asset in the balance sheets.

Rent expense was $1.2 million for both years ended December 31, 2023 and 2022.

As of December 31, 2023 and 2022, the Company had an operating lease right-of-use asset of $2.3 million and $2.8 million, respectively and lease liability of $2.7 million and $3.3 million, respectively. As of December 31, 2023 and 2022, the weighted-average discount rate was 12.9%. The weighted average remaining term of the Company’s leases as of December 31, 2023 was 2.7 years.