5. LEASES

9 Months Ended

Sep. 30, 2023

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 September 30, 2023, the remaining future cash payments under our lease total to $190,290.

For the nine months ended September 30, 2023, we amortized $99,159 of our operating right-of-use, or ROU, asset and made payments of the associated lease liability for the same amount. At September 30, 2023, an operating ROU asset and liability of $179,927, each, are included on our condensed consolidated balance sheet.

For the nine months ended September 30, 2023 and 2022, our fixed operating lease cost was $114,174, 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 September 30, 2023, were as follows:

Year ending December 31,
2023 (three months remaining)	$38,058
2024	152,232
Total future minimum lease payments	190,290
Present value of discount	(10,363)
Current portion lease liability	(142,402)
Long-term lease liability	$37,525