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Leases

6 Months Ended

Jun. 30, 2023

NOTE 6 – LEASES

During the six months ended, we had operating leases for office space in two multi tenant facilities in Rochester, Michigan and Zagreb, Croatia. We also had a lease on office space in Cranbury, New Jersey, which expired in January 2022. The lease in Rochester, Michigan was terminated during the quarter ended June 30, 2023. The lease in Zagreb, Croatia ends on February 28th, 2024.

Lease-related assets, or right-of-use assets, are recognized at the lease commencement date at amounts equal to the respective lease liabilities, adjusted for prepaid lease payments, initial direct costs, and lease incentives received. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rate. Amortization of the right of use assets is recognized as non-cash lease expense on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Short term lease costs include month to month leases and occasional rent for transient meeting and office spaces in shared office space facilities.

For the six months ended June 30, 2023 and 2022, the Company’s lease cost consists of the following components, each of which is included in operating expenses within the Company’s condensed consolidated statements of operations:

	Six Months Ended June 30,
	2023		2022
Operating lease cost	$	49,472	$	49,747
Short-term lease cost		8,340		21,899
Total lease cost	$	57,812	$	71,646

The table below presents the future minimum lease payments to be made under operating leases as of June 30, 2023:

As of June 30, 2023

2023	$	10,170
2024		5,085
Total		15,255
Less: discount		1,236
Total lease liabilities	$	14,019

The weighted average remaining lease term at June 30, 2023 for operating leases is 0.7 years and the weighted average discount rate used in calculating the operating lease asset and liability is 4.5%. Cash paid for amounts included in the measurement of lease liabilities was $44,708 and $45,599 for the six months ended June 30, 2023 and 2022, respectively. For the six months ended June 30, 2023 and 2022, payments on lease obligations were $49,359 and $52,168, respectively, and amortization on the right of use assets was $49,472 and $52,662, respectively.