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Leases
 6 Months Ended
Jun. 30, 2022
Leases  
Leases

NOTE 10 – Leases

 

As of January 1, 2019, the Company adopted ASC Topic 842, Leases, which allows the Company to apply the transition provision at the Company’s adoption date instead of at the earliest comparative period presented in the financial statements. Therefore, the Company recognized and measured leases existing at January 1, 2019 but without retrospective application. In addition, the Company elected the optional practical expedient permitted under the transition guidance which allows the Company to carry forward the historical accounting treatment for existing leases upon adoption. No impact was recorded to the beginning retained earnings for ASC Topic 842. The Company had three operating leases  as of June 30, 2022. The leased assets in Flywheel are presented as right-of-use assets.

 

The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the operating lease liabilities recorded in the statements of financial position as of June 30, 2022:

 

   Flywheel   Flywheel   Flywheel 
   January 2020   January 2022   June 2022 
Initial lease term  to August 2022   to December 2023   to May 2024 
             
Initial recognition of right-of-use assets  $26,995   $488,262   $105,632 
Weighted-average remaining lease term
at June 30, 2022		   0.2    1.5    1.9 
Weighted-average discount rate at
June 30, 2022		   8.11%   8.11%   8.11%

 

Current lease liabilities as of June 30, 2022 and December 31, 2021 were $303,923 and $0. Long-term lease liabilities as of June 30, 2022 and December 31, 2021 were $184,704 and $0. The right-of-use assets balance as of June 30, 2022 and December 31, 2021, were $485,066 and $30,111.

 

 

HOUR LOOP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

(Unaudited)

 

In 2022, Flywheel has entered into two new lease agreements for office space in Taiwan. The lease terms are January 1, 2022 to December 31, 2023, and June 1, 2022 to May 31, 2024, respectively, and the total contract amounts are $530,760 and $114,016, respectively.

 

      
For the Year Ending    
June 30,  Amount 
     
2022  $174,589 
2023   332,418 
2024   23,753 
2025   - 
2026 and thereafter   - 
Total minimum lease payments   530,760 
Less: effect of discounting   (42,133)
Present value of the future minimum lease payment lease payment   488,627 
Less: current operating lease liabilities   (303,923)
Total long-term operating lease liabilities  $184,704