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LEASES

9 Months Ended

Sep. 30, 2022

NOTE 10 — LEASES

With the adoption of ASC 842, operating lease agreements are required to be recognized on the balance sheet as ROU assets and corresponding lease liabilities.

On January 1, 2022, the Company exercised its right to lease an additional 400 square feet of office space and an increase of monthly rent of $500. In accordance with ASC 842 management accounted for this as a separate lease and, as a result, recorded an ROU asset and lease liability of $11,359.

When measuring lease liabilities for leases that were classified as operating leases, the Company discounted lease payments using its estimated incremental borrowing rate at January 1, 2022. The weighted average incremental borrowing rate applied was 9%.

Operating leases are included in the condensed consolidated balance sheets as follows:

Schedule of Operating leases
	Classification	9/30/2022		12/31/2021
Lease assets
Operating lease cost ROU assets	Assets	$	7,512	$	-
Total lease assets		$	7,512	$	-

Lease liabilities
Operating lease liabilities, current	Current liabilities	$	49,562	$	40,845
Operating lease liabilities, non-current	Liabilities		17,634		49,089
Total lease liabilities		$	67,196	$	89,934

The components of lease costs, which are included in income from operations in our unaudited condensed consolidated statements of operations, were as follows:

Schedule of Lease costs
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Leases costs
Operating lease costs	$	13,500	$	12,000	$	40,500	$	36,000
Total lease costs	$	13,500	$	12,000	$	40,500	$	36,000

Future minimum payments under non-cancellable leases for operating leases for the remaining terms of the leases following the nine months ended September 30, 2022:


Fiscal Year	Operating Leases
Remainder of 2022	$	13,341
2023		53,675
2024		4,496
Total future minimum lease payments		71,512
Amount representing interest		4,316
Present value of net future minimum lease payments	$	67,196

Additional information related to leases is presented as follows:


	September 30, 2022			December 31, 2021
Leases
Weighted average remaining lease term		1.25			2.00
Weighted average discount rate		9.9	%		10	%