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LEASES

9 Months Ended

Sep. 30, 2022

NOTE 8 – LEASES

The Company leases office space domestically under operating leases. The Company’s headquarters are located in New York, New York for which the lease expires in 2025. We operate a marketing and sales center in Huntington Beach, California for which the lease expires in 2023, a patient care center in Greenville, South Carolina for which the lease expires in 2024 and a warehouse and fulfillment center in Columbia, Pennsylvania for which the lease expires in 2023.

The table below reconciles the undiscounted future minimum lease payments under the above noted operating leases to the total operating lease liabilities recognized on the consolidated balance sheet as of September 30, 2022:


Remainder of fiscal year 2022	$	225,519
Fiscal year 2023		732,409
Fiscal year 2024		484,580
Fiscal year 2025		68,850
Less: imputed interest		(103,419	)
Present value of operating lease liabilities	$	1,407,939

Operating lease expenses were $199,584 and $95,791 for the three months ended September 30, 2022 and 2021, respectively, and $603,275 and $286,294 for the nine months ended September 30, 2022 and 2021, respectively, and were included in other operating expenses in our consolidated statement of operations.

Supplemental cash flow information related to operating lease liabilities consisted of the following:

	September 30,
	2022		2021
Cash paid for operating lease liabilities	$	517,871	$	269,806

Supplemental balance sheet information related to operating lease liabilities consisted of the following:

	September 30, 2022			December 31, 2021
Weighted average remaining lease term in years		3.05			3.75
Weighted average discount rate		7.16	%		7.15	%

We have elected to apply the short-term lease exception to the warehouse space we lease in Lancaster, Pennsylvania. This lease has a term of 12 months and is not recognized on the balance sheet, but rather expensed on a straight-line basis over the lease term. Straight-line lease payments are $2,100 per month. Additionally, Conversion Labs PR utilizes office space in Puerto Rico, which is subleased from Fried LLC, on a month-to-month basis, incurring rental expense of approximately $3,000 per month.