Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies [Abstract]

13.

COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company’s leases consist solely of retail showroom and office space in Lakewood, New Jersey which matures in October 2024.

The Company determines whether an arrangement is or contains a lease at inception by evaluating potential lease agreements including services and operating agreements to determine whether an identified asset exists that the Company controls over the term of the arrangement. Lease commencement is determined to be when the lessor provides access to, and the right to control, the identified asset.

The rental payments for the Company’s leases are typically structured as either fixed or variable payments. Fixed rent payments include stated minimum rent and stated minimum rent with stated increases. The Company considers lease payments that cannot be predicted with reasonable certainty upon lease commencement to be variable lease payments, which are recorded as incurred each period and are excluded from the calculation of lease liabilities.

Management uses judgment in determining lease classification, including determination of the economic life and the fair market value of the identified asset. The fair market value of the identified asset is generally estimated based on comparable market data provided by third-party sources.

The Company has three sublease arrangements for total sublease income of approximately $2,600 per month. All subleases are month to month.

The Company’s lease noted above is currently classified as an operating lease.

The components of the Company’s lease costs, which are included in general and administrative expenses on the accompanying statement of comprehensive loss for the year ended December 31, 2023, are as follows:

	Year Ended
	December 31,
	2023			2022
Operating lease cost	$	89,276		$	88,279
Sublease income		(28,561	)		(30,464	)
Total lease cost	$	60,715		$	57,815

Additional information related to the Company’s lease for the years ended December 31, 2023 and 202 is as follows:

	Year Ended
	December 31,
	2023			2022
Operating cash flows from operating lease	$	60,574		$	59,569
Right-of-use assets obtained in exchange for new operating lease liabilities	$	-		$	168,112
Remaining lease term - operting lease		0.8 years			1.8 years
Discount rate - operating lease		8.0	%		8.0	%

As of December 31, 2023, the future minimum lease payments under operating lease liabilities are as follows:

Year Ended December 31,
2024		61,116
Total	$	61,116

Contingencies

The Company may be subject to pending legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the final outcome, if any, arising out of any such matters will have a material adverse effect on its business, financial condition or results of operations.

PishPosh, Inc. 10-K/A