LEASES

6 Months Ended

Jun. 30, 2022

Leases

LEASES

NOTE 7: LEASES

Operating lease

We have two noncancelable operating leases for office facilities, one that we entered into January 2019 and that expires April 10, 2024 and another that we entered into in April 2022 and that expires April 30, 2024. Each operating lease has a renewal option and a rent escalation clause. We relocated to the expanded square footage of the premises that are the subject of the April 2022 lease to support our growing operations, and entered into a commission agreement with the landlord of the building to sublet the premises that are the subject of the January 2019 lease.

We recognized total lease expense of approximately $83,339 and $24,000 for the six months ended June 30, 2022 and 2021, respectively, primarily related to operating lease costs paid to lessors from operating cash flows. As of June 30, 2022 and December 31, 2021, we recorded a security deposit of $10,000.

At June 30, 2022, future minimum lease payments under operating leases that have initial noncancelable lease terms in excess of one year were as follows:

	Total
Year Ended December 31,
2022 (excluding the six months ended June 30, 2022)		63,650
2023		131,150
Thereafter		-
		194,800
Less: Imputed interest		(11,880	)
Operating lease liabilities		182,920
Operating lease liability - current		118,848
Operating lease liability - non-current	$	64,072

The following summarizes other supplemental information about our operating leases as of June 30, 2022:

Weighted average discount rate	8	%
Weighted average remaining lease term (years)	1.54

Financing leases

We lease computer and hardware under non-cancellable capital leases. The term of those capital leases is 3 years and annual interest rate is 12%. At June 30, 2022 and December 31, 2021, the capital lease obligations included in current liabilities were $41,914 and $72,768, respectively, and capital lease obligations included in long-term liabilities were $0 and $10,341, respectively. As of June 30, 2022 and December 31, 2021, we recorded a security deposit of $10,944.

At June 30, 2022, future minimum lease payments under the finance lease obligations, are as follows:

	Total
2022 (excluding the six months ended June 30, 2022)	$	33,285
2023		10,496
Thereafter		-
		43,781
Less: Imputed interest		(1,867	)
Finance lease liabilities		41,914
Finance lease liability		41,914
Finance lease liability - non-current	$	-

As of June 30, 2022 and December 31 2021, finance lease assets are included in property and equipment as follows:

	June 30,			December 31,
	2022			2021
Finance lease assets	$	267,284		$	267,284
Accumulated depreciation		(231,156	)		(192,928	)
Finance lease assets, net of accumulated depreciation	$	36,128		$	74,356