Note 14— Commitments and Contingencies

Operating Leases

The Company has entered into non-cancellable operating leases for office, warehouse, and distribution facilities, with original lease periods expiring through 2024. In addition to minimum rent, certain of the leases require payment of real estate taxes, insurance, common area maintenance charges, and other executory costs. Differences between rent expense and rent paid are recognized as adjustments to operating lease right-of-use assets on the consolidated balance sheets.

Total rent expense for the six months ended June 30, 2022 and 2021 was $365,066 and $59,277, respectively. Rent expense is included in general and administrative expense on the consolidated statements of operations. As of June 30, 2022, the Company had operating lease liabilities of $640,391 and right of use assets for operating leases of $629,521. Excluded from the measurement of operating lease liabilities and operating lease right-of-use assets were certain office, warehouse and distribution contracts that qualify for the short-term lease recognition exception.

Supplemental balance sheet information related to leases are as follows:

 Schedule of Operating Lease Liabilities

Future minimum lease payments under operating leases as of June 30, 2022, are as follows:

 Schedule of Reconciliation of Future Undiscounted Cash Flows

As of June 30, 2022, the weighted-average remaining lease term for operating leases is 33.46 months, or 2.79 years.

Legal Contingencies

The Company is involved in claims and litigation in the ordinary course of business, some of which seek monetary damages, including claims for punitive damages, which are not covered by insurance. For certain pending matters, accruals have not been established because such matters have not progressed sufficiently through discovery, and/or development of important factual information and legal information is insufficient to enable the Company to estimate a range of possible loss, if any. An adverse determination in one or more of these pending matters could have an adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

We are, and may in the future become, subject to various legal proceedings and claims that arise in or outside the ordinary course of business.