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LEASES
 6 Months Ended
Jun. 30, 2023
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%.

 

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

 

  Classification   June 30,
2023		     December 31,
2022		  
Lease assets                    
Operating lease cost ROU assets   Assets   $ 3,397     $ 6,171  
Total lease assets       $ 3,397     $ 6,171  
                 
Lease liabilities                
Operating lease liabilities, current   Current liabilities   $ 30,487     $ 50,797  
Operating lease liabilities, non-current   Liabilities     -       4,463  
Total lease liabilities       $ 30,487     $ 55,260  

 

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

 

               
    Three Months Ended
June 30,		  
    2023     2022  
Leases costs                
Operating lease costs   $ 13,500     $ 13,500  
Total lease costs   $ 13,500     $ 13,500  

 

    Six Months Ended
June 30,		  
    2023     2022  
Leases costs                
Operating lease costs   $ 27,000     $ 27,000  
Total lease costs   $ 27,000     $ 27,000  

 

Future minimum payments under non-cancellable leases for operating leases for the remaining terms of the leases following the six months ended June 30, 2023:

 

       
Fiscal Year   Operating
Leases		  
Remainder of 2023   $ 26,901  
2024     4,496  
Total future minimum lease payments     31,397  
Amount representing interest     910  
Present value of net future minimum lease payments   $ 30,487  

 

Additional information related to leases is presented as follows:

 

  June 30,
2023		     December 31,
2022		  
Leases                
Weighted average remaining lease term     0.5       1.00  
Weighted average discount rate     9.9 %     9.9 %