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Operating Lease Right-of-use Asset and Operating Lease Liability
 9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Operating Lease Right-of-use Asset And Operating Lease Liability    
Operating Lease Right-of-use Asset and Operating Lease Liability

Note 4 – Operating Lease Right-of-use Asset and Operating Lease Liability

 

Operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 10%, as the interest rate implicit in most of our leases is not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term. During the nine months ended September 30 2022, and 2021, the Company recorded $52,631 and $52,445, respectively, as operating lease expense.

 

The Company currently has a lease agreement which allows for the use of a laboratory facility for a monthly payment of $6,291, which monthly lease payment increases by 3% every year. The laboratory lease commenced October 1, 2018, with the first payment due January 1, 2019, and expires on October 31, 2023. A security deposit of $6,480 is being held for the duration of the lease term.

 

In adopting ASC Topic 842, Leases (Topic 842), the Company has elected the ‘package of practical expedients,’ which permits the Company to avoid reassessing its prior conclusions about lease identification, lease classification and initial direct costs under the new standard. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements, as the latter is not applicable to the Company. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 month or less. On January 1, 2019, upon adoption of ASC Topic 842, the Company recorded a right-of-use asset.

 

The Right-of-use assets are summarized below:

 

   September 30,   December 31, 
   2022   2021 
Office Lease  $265,207   $265,207 
Less accumulated amortization   (193,237)   (148,225)
Right-of-use, net  $71,970   $116,982 

 

 

Amortization on the right-of-use asset is included in rent expense on the statements of operations.

 

Operating lease liabilities are summarized below:

 

   September 30,   December 31, 
   2022   2021 
Office Lease  $80,378   $129,376 
Less: current portion   (73,707)   (66,934)
Long term portion  $6,671   $62,442 

 

The Maturities of lease liabilities are summarized below:

 

    As of 
    September 30, 
    2022 
2022   $19,440 
2023    64,800 
Total future minimum lease payments    84,240 
Less imputed interest    (3,862)
PV of Payments   $80,378 

 

Note 4 – Operating Lease Right-of-use Asset and Operating Lease Liability

 

Operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 10%, as the interest rate implicit in most of our leases is not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term. During the twelve months ended December 31, 2021, and the year ended December 31, 2020, the Company recorded $74,028 and $71,872, respectively, as operating lease expense.

 

The Company currently has a lease agreement which allows for the use of a laboratory facility for a monthly payment of $6,107, which monthly lease payment increases by 3% every year. The laboratory lease commenced October 1, 2018, with the first payment due January 1, 2019, and expires on October 31, 2023. A security deposit of $6,480 is being held for the duration of the lease term.

 

In adopting ASC Topic 842, Leases (Topic 842), the Company has elected the ‘package of practical expedients,’ which permits the Company to avoid reassessing its prior conclusions about lease identification, lease classification and initial direct costs under the new standard. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements, as the latter is not applicable to the Company. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 month or less. On January 1, 2019, upon adoption of ASC Topic 842, the Company recorded a right-of-use asset.

 

   December 31,   December 31, 
   2021   2020 
Office Lease  $265,207   $265,207 
Less accumulated amortization   (148,225)   (93,609)
Right-of-use, net  $116,982   $171,598 

 

The Right-of-use assets are summarized below:

 

Amortization on the right-of -use asset is included in rent expense on the statements of operations.

 

Operating lease liabilities are summarized below:

 

   December 31, 
   2021 
Office Lease  $129,376 
Less: current portion   (66,934)
Long term portion  $62,442 

 

The Maturities of lease liabilities are summarized below:

   As of 
   December 31, 
   2021 
2022  $76,248 
2023   64,800 
Total future minimum lease payments   141,048 
Less imputed interest   (11,672)
PV of Payments  $129,376