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OPERATING LEASES

9 Months Ended

Sep. 30, 2022

NOTE 8 - OPERATING LEASES

The Company periodically enters operating lease contracts for office space and equipment. Arrangements are evaluated at inception to determine whether such arrangements constitute a lease.

Right of use assets (“ROU assets”) represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities were recognized on the transition date based on the present value of lease payments over the respective lease term, with the office space ROU asset adjusted for deferred rent liability.

The Company has three active operating leases: two office space leases with remaining lease terms of 21 and 52 months, respectively, and a facility lease with a remaining term of 35 months as of September 30, 2022. All other leases are short-term leases, which for practical expediency, the Company has elected to not recognize as ROU assets and lease liabilities.

In accordance with ASC Topic 842, Leases, the Company has recorded ROU assets of $854,723 and a related lease liability of $866,816 as of September 30, 2022. The Company recorded lease expense of $210,317 for the nine months ended September 30, 2022 for its leased assets and $139,091 for the nine months ended September 30, 2021. Cash paid for amounts included in the measurement of operating lease liabilities was $210,897 for the nine months ended September 30, 2022 and $139,667 for the nine months ended September 30, 2021. The present value of the Company’s operating lease liabilities is shown below.

Maturity of Operating Lease Liabilities

SCHEDULE OF OPERATING LEASE LIABILITY

	September 30, 2022
Remainder of 2022		85,291
2023		344,565
2024		273,981
2025		159,469
2026		79,161
Thereafter		6,727

Total lease payments		949,194
Less imputed interest		(82,378	)
Present Value of Lease Liabilities	$	866,816

Operating lease liabilities – current		299,072
Operating lease liabilities – long-term		567,744

As of September 30, 2022, the Company’s operating leases have a weighted average remaining lease term of 3.1 years and a weighted average discount rate of 4.09%.