LEASES

9 Months Ended

Sep. 30, 2022

Note 17

LEASES

Operating Leases

The Company accounts for leases in accordance with ASC Topic 842, Leases (“ASC 842”). All contracts are evaluated to determine whether or not they represent a lease. A lease conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company has operating leases primarily consisting of facilities with remaining lease terms of one year to five years. The lease term represents the period up to the early termination date unless it is reasonably certain that the Company will not exercise the early termination option. Certain leases include rental payments that are adjusted periodically based on changes in consumer price and other indices.

Leases are classified as finance or operating in accordance with the guidance in ASC 842. The Company does not hold any finance leases.

The Company is obligated under operating lease agreements for office facilities in (i) Florida, (ii) Washington, (iii) Colorado and (iv) Argentina that expire in (i) December 2024, (ii) December 2022, (iii) February 2026 and (iv) July 2024, respectively. The Company also has two short-term leases related to offices in Pennsylvania and Massachusetts. These short-term leases are currently leased on a month-to-month basis. A short-term lease is a lease with a term of 12 months or less and does not include the option to purchase the underlying asset that we would expect to exercise. The Company has elected to adopt the short-term lease exemption in ASC 842 and as such have not recognized a “right of use” asset or lease liability for these short-term leases.

The Company’s lease agreements generally do not provide an implicit borrowing rate, therefore an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments.

Supplemental cash flow information and non-cash activity related to leases for the nine months ended September 30, 2022 and 2021 were as follows:

	For the Nine Months Ended September 30,
	2022		2021
Cash used in operating leases	$	236,832	$	211,077
ROU assets obtained in exchange for new operating lease liabilities	$	39,791	$	1,082,684

ROU lease assets and lease liabilities for the Company’s operating leases were recorded in the condensed consolidated balance sheet as follows:

	September 30, 2022		December 31, 2021
Right of use assets, net	$	706,272	$	859,637

Short-term operating lease liabilities	$	265,474	$	247,325
Long-term operating lease liabilities		444,996		611,523
Total lease liabilities	$	710,470	$	858,848
Weighted average remaining lease term (in years)		2.60		3.32
Weighted average discount rate		8.5%		8.5%

The components of lease expense were as follows for each of the periods presented:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Operating lease expense	$	84,262	$	81,936	$	241,824	$	191,182
Short-term lease expense	$	55,965	$	19,393	$	174,374	$	62,916
Total operating lease costs	$	140,227	$	101,329	$	416,198	$	254,098

Future lease payments included in the measurement of lease liabilities on the condensed consolidated balance sheet as of September 30, 2022, for the following five fiscal years and thereafter were as follows:

	September 30, 2022
2022 (Remaining)	$	82,598
2023		308,594
2024		302,123
2025		85,726
2026		14,287
Total future minimum lease payments	$	793,328
Less imputed interest		(82,858	)
Total	$	710,470