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LEASES
 12 Months Ended
Dec. 31, 2022
Leases  
LEASES

NOTE 9 — 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%.

 

The following table presents net lease cost and other supplemental lease information:

 

          
   For the
Year Ended
December 31,		 
   2022   2021 
Lease cost          
Operating lease cost (cost resulting from lease payments)  $54,000   $48,000 
Net lease cost  $54,000   $48,000 
           
Operating lease – operating cash flows (fixed payments)  $54,000   $48,000 
Operating lease – operating cash flows (liability reduction)  $46,033   $36,973 

 

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

 

              
      As of
December 31,		 
   Classification  2022   2021 
Lease assets             
Operating lease cost ROU assets  Assets   6,171    - 
Total lease assets     $6,171   $- 
              
Lease liabilities             
Operating lease liabilities, current  Current Liabilities  $50,797   $40,845 
Operating lease liabilities, non-current  Liabilities   4,463    49,089 
Total lease liabilities     $55,260   $89,934 
             
Cash Flow - Lease impact            
Lease Liability      $46,033   $36,973 
Total lease liability      $46,033   $36,973 

 

Future minimum payments under non-cancellable leases for operating leases for the remaining terms of the leases following the year ended December 31, 2022:

 

     
Fiscal Year  Operating Leases 
2023  $53,675 
2024   4,496 
Total future minimum lease payments   58,171 
Amount representing increase   2,911 
Present value of net future minimum lease payments  $55,260 

 

Additional information related to leases is presented as follows:

 

          
   Years Ended
December 31,		 
Leases  2022   2021 
Weighted average remaining lease term   1    2 
Weighted average discount rate   9.9%   10.0%