5. LEASES

3 Months Ended

Mar. 31, 2022

Notes

5. LEASES

5.     LEASES

We determine if a contract contains a lease by evaluating the nature and substance of the agreement. The only lease that we have is the real estate lease for our headquarters facility, which was originally executed on December 2, 1999, and which has been extended several times. This lease was renewed for a term of five additional years. We recognize lease expense for this lease on a straight-line basis over the lease term.

We used our incremental borrowing rate (8.5%) in determining the present value of the lease payments over the lease expiration date of December 31, 2024. At March 31, 2022, the remaining future cash payments under our lease total to $418,638.

For the three months ended March 31, 2022, we amortized $29,728 of our operating right-of-use, or ROU, asset and made payments of

the associated lease liability for the same amount. At March 31, 2022, an operating ROU asset and liability of $372,142, each, are included on our condensed consolidated balance sheet.

For the three months ended March 31, 2022 and 2021, our fixed operating lease cost was $38,058, which is included within operating costs and expenses in our condensed consolidated statements of operations.

Future minimum lease payments under non-cancellable operating lease as of March 31, 2022, were as follows:

Year ending December 31,
2022 (nine months remaining)	$114,174
2023	152,232
2024	152,232
Total future minimum lease payments	418,638
Present value of discount	(46,496)
Current portion lease liability	(125,412)
Long-term lease liability	$246,730