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Leases

6 Months Ended

Jun. 30, 2023

Note 9. Leases

In May 2023, the Company entered into 36-month operating lease, which provides for approximately 1,800 square feet of office space, that commenced on June 1, 2023 and ends on May 31, 2026. The lease required a $2,850 security deposit and monthly lease payments are $2,850 the first year of the lease, $2,964 the second year and $3,082 the third year.

Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. On the commencement date of the lease, the Company recorded $92,425 related to the ROU asset and lease liability.

The components of lease expense and supplemental cash flow information related to the lease for the period are as follows:

	Six Months Ended June 30, 2023
Lease Cost
Operating lease cost (included in general and administrative in the Company’s statement of operations)	$	2,850

Other Information
Cash paid for amounts included in the measurement of lease liabilities for the six months ended June 30, 2023	$	2,850
Weighted average remaining lease term – operating leases (in years)	2.92 years
Average discount rate – operating lease		10	%

The supplemental balance sheet information related to leases for the period is as follows:

	At June 30, 2023		At December 31, 2022
Operating leases
Remaining right-of-use assets	$	89,575	$	-

Short-term operating lease liabilities	$	22,208	$	-
Long-term operating lease liabilities	$	67,367	$	-
Total operating lease liabilities	$	89,575	$	-

Maturities of the Company’s undiscounted lease liabilities are as follows:

Year Ending	Operating Leases
2023 (Remaining)	$	17,100
2024		34,998
2025		36,394
2026		15,410
Total lease payments		103,902
Less: Imputed interest/present value discount		(14,327	)
Present value of lease liabilities	$	89,575