Company: FTII
Filing Date: 2025-02-14
Form Type: S-4
Source: 0001493152-25-006997
Chunk: 643

Company: FutureTech II Acquisition Corp.
Filing Date: 2025-02-14
Form: S-4
Chunk 643
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118 |

<div align='center'>CEREVAST MEDICAL, INC.

NOTES TO FINANCIAL STATEMENTS</div>

Note 10 – Commitments and Contingencies

Facility Lease

The Company has a facility lease pursuant to which it leases approximately 6,287 square feet of office and lab space in Bothell, Washington. The Company adopted ASC 842, Leases, on January 1, 2022 using the modified retrospective approach. Under this approach, the new standard is applied to all leases on the date of initial application, i.e. January 1, 2022. Adoption of ASC 842 resulted in an increase to total assets and liabilities due to the recording of an operating ROU asset and an operating lease obligation of $262,985 and $289,665, respectively, as of January 1, 2022. There was no cumulative adjustment to retained earnings as a result of adoption of ASC 842.

In July 2023, the Company entered into an amendment to its facility lease to extend the lease term for an additional two year period. The lease was set to expire on February 1, 2024. Under the provisions of the lease amendment, the lease has been extended through January 2026 with an option to renew at then prevailing market rates for an additional 3 year period. The lease amendment increases the base rent from the then current $22.00 per square foot to $23.00 per square foot effective February 1, 2024 and to $24.00 per square foot effective February 1, 2025. The lease amendment also includes a 1-month rent abatement period at the commencement of the lease extension period. The Company recorded an increase in its right of use asset and corresponding operating lease obligation totaling $245,243 associated with the lease extension.

Monthly rent includes both base rent (fixed rent) plus the Company’s prorated share of common building expenses (variable rent).

The Company’s facility lease is its only lease and is classified as an operating lease. As of December 31, 2023, the lease had a remaining lease term of 2.08 years and a discount rate of 13.25%.

In 2023, the Company recognized rent expense totaling $234,950 of which $140,664 was fixed and $94,286 was variable. Of the total rent expense recognized in 2023, $59,234 was charged to general and administrative expense and $175,716 to research and