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Leases

3 Months Ended

Mar. 31, 2023

Note 12. Leases

The Company has non-cancellable operating leases for facility space with varying terms. All of the active leases for facility space qualified for capitalization under FASB ASC 842, Leases. These leases have remaining lease terms between one to 7 years and may include options to extend the leases for up to ten years. The extension terms are not recognized as part of the right-of-use assets. The Company has elected not to capitalize leases with terms equal to, or less than, one year. As of March 31, 2023, and December 31, 2022, net assets recorded under operating leases were $977,113 and $1,016,198 on, respectively, and net lease liabilities were $1,045,995 and $1,028,233, respectively.

The Company analyzes contracts above certain thresholds to identify leases and lease components. Lease and non-lease components are not separated for facility space leases. The Company uses its contractual borrowing rate to determine lease discount rates when an implicit rate is not available. Total lease cost for the three months ended March 31, 2023 and for the year ended December 31, 2022, included in Condensed Consolidated Statements of Operations, is detailed in the table below:

Schedule of Lease Cost

	Three months ended March 31, 2023 (Unaudited)		Year ended December 31, 2022 (Audited)
	Three months ended March 31, 2023		Year ended December 31, 2022
Operating lease cost	$	-	$	-
Short-term lease cost		87,742		99,246
Total Lease Cost	$	87,742	$	99,246

Schedule of Right Of Use Assets


ROU assets that are related to lease properties are presented as follows:
Beginning balance	$	1,016,198		$	-
Additions to right-of-use assets		-			1,029,226
Amortization charge for the period		(39,085	)		(13,028	)
Lease modifications		-			-
Ending balance	$	977,113		$	1,016,198

Further information related to leases is as follows:
Weighted-average remaining lease term		4.29 Years			4.42 Years
Weighted-average discount rate		6.87	%		6.87	%

Future minimum lease payments as of March 31, 2023, and December 31, 2022, are as follows:

Year
2023	$	91,303	$	91,303
2024		197,520		197,520
2025		217,925		217,925
2026		222,275		222,275
2027		226,705		226,705
Thereafter		348,926		348,926
Total future minimum lease payments	$	1,304,654	$	1,304,654
Less: Imputed interest		258,659		276,421
Operating lease liabilities		1,045,995		1,028,233
Less: Current portion		66,726		20,124
Non-current portion of lease liabilities	$	979,269	$	1,008,109