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Leases
 9 Months Ended
Sep. 30, 2023
Leases [Abstract]  
Leases

12. Leases

 

For operating leases, the Company records a right-of-use assets and corresponding lease liabilities in the consolidated balance sheets for all leases with terms longer than twelve months. The Company has three operating leases, with no variable lease costs, and no finance leases as of September 30, 2023. The Company has two operating leases, with no variable lease costs, and no finance leases and December 31, 2022.

 

 

On April 3, 2023, the Company executed a lease for new office space next to the existing space at Invizyne in the Los Angeles, California metropolitan area. The lease with a term of 60 months which began on July 1, 2023 and ending on June 30, 2028, without an option to extend. The initial base rent was $13,277 per month. The lease provides for annual increases. The base rent for the lease in the final year is $14,943 per month.

  

In April 2023, Invizyne made changes to an existing lease agreement, which resulted in an extension of the lease term by an additional 21 months. The revised lease maintained the same escalation rate for lease payments as the previous arrangement. To account for this modification, the Company reevaluated the remaining lease term at the time of execution. As the Company was actively utilizing the premises, adjustments were made to reflect the revaluation of both the right-to-use asset and the corresponding lease liability in line with the updated lease term. This was originally entered into in August 2021, with a term of 60 months beginning on May 1, 2023 and ending on April 30, 2028, with an option to extend for 60 additional months. At the time the lease commenced, it was not probable the Company would exercise the one five-year option to extend the facility lease; therefore, this extension option is not included in the lease analysis. The initial base rent is $14,371 per month. The lease provides for annual increases. The base rent for the lease in the final year is $16,259 per month. Additionally, Invizyne is responsible for annual operating cost increases of 2.5%, which are included in the rent.

 

On July 1, 2022, the Company executed a lease for new office space in the Dallas, Texas metropolitan area. The lease with a term of 91 months which began on December 20, 2022 and ending on July 20, 2030, without an option to extend. The initial base rent was $12,556 per month, after 7 months of free rent. The lease provides for annual increases. The base rent for the lease in the final year is $13,937 per month.

 

  

September 30,

2023

  

December 31,

2022

 
         
Operating leases:          
Right-of-use assets  $2,126,213   $1,409,732 
Operating lease liabilities  $2,210,005   $1,423,538 
           
Weighted average remaining lease term in years   5.44    5.62 
Weighted average discount rate   7.66%   6.71%
           
Cash paid for amounts included in the measurement of lease liabilities  $206,837   $147,661 
Right-of-use assets obtained in exchange for lease liabilities  $896,803   $813,003 
           
Operating lease cost  $276,823   $106,980 
Short-term lease costs   29,049    19,200 
Total operating lease costs  $305,872   $126,180 

 

 

Future payments due under operating leases as of September 30, 2023 are as follows:

 

Year  Amount 
Remainder of 2023  $121,688 
2024   491,624 
2025   503,684 
2026   516,001 
2027   528,586 
Thereafter   576,564 
Total  $2,738,147 
Less effects of discounting   (528,142)
Total operating lease liabilities  $2,210,005