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OPERATING LEASES
 12 Months Ended
Dec. 31, 2022
Operating Leases  
OPERATING LEASES

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 material operating leases for office space. The leases have remaining lease terms of 18, 49 and 32 months as of December 31, 2022. All other material 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 $806,402 and a related lease liability of $819,224 as of December 31, 2022. The Company recorded lease expense of $ 297,136 for the year ended December 31, 2022 for its leased assets and $202,498 for the year ended December 31, 2021. Cash paid for amounts included in the measurement of operating lease liabilities was $296,988 for the year ended December 31, 2022 and $203,555 for the year ended December 31, 2021. The present value of the Company’s operating lease liabilities as of December 31, 2022 is shown below.

 

 

Maturity of Operating Lease Liabilities

 

      
Year  Total 
2023  $354,165 
2024   283,581 
2025   168,269 
2026   79,161 
2027   6,727 
      
Total lease payments  $891,903 
Less imputed interest   (72,679)
Present Value of Lease Liabilities  $819,224 
      
Operating lease liabilities – current  $313,933 
Operating lease liabilities – long-term  $505,291 

 

As of December 31, 2022, the Company’s operating leases have a weighted average remaining lease term of 2.9 years and a weighted average discount rate of 6.21%.