Operating Lease Right-Of-Use Assets and Operating Lease Liabilities

12 Months Ended

Dec. 31, 2022

Operating Lease Right-of-Use Assets and Operating Lease Liabilities [Abstract]

OPERATING LEASE RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES

NOTE 4 – OPERATING LEASE RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES

In January 2019, the Company renewed and extended the term of its lease facility for another three-year period from January 2019 to December 2021 starting with a monthly base rent of $2,567 plus a pro rata share of operating expenses beginning January 2019. The base rent was subject to annual increases beginning the 2^nd and 3^rd lease year as defined in the lease agreement. In addition to the monthly base rent, the Company is charged separately for common area maintenance which is considered a non-lease component. These non-lease component payments are expensed as incurred and are not included in operating lease assets or liabilities. On August 27, 2021, the Company entered into an amendment agreement with the same landlord to modify the facility lease to relocate and increase the square footage of the lease premises. The term of the lease commenced on October 1, 2021 and will expire on December 31, 2024 with a new monthly base rent of $7,156 plus a pro rata share of operating expenses beginning January 2022. The base rent will be subject to 3% annual increases beginning in the 2^nd and 3^rd lease year as defined in the amended lease agreement. For the years ended December 31, 2022 and 2021, rent expense amounted $94,924 and $78,280, respectively, and was included in general and administrative expenses.

On August 27, 2021, upon the execution of the amendment agreement, the Company recorded right-of-use assets and operating lease liabilities of $198,898. The remaining lease term for the operating lease is 39 months and the incremental borrowing rate is 18.0% (based on historical borrowing rates) on December 31, 2022.

Right-of- use assets are summarized below: 

	December 31, 2022			December 31, 2021
Office lease	$	198,898		$	271,507
Less accumulated amortization		(64,372	)		(87,198	)
Right-of-use asset, net	$	134,526		$	184,309

Operating Lease liabilities are summarized below:

	December 31, 2022			December 31, 2021
Office lease	$	198,898		$	271,507
Reduction of lease liability		(47,885	)		(66,598	)
Total lease liability		151,013			204,909
Less: current portion		67,338			53,897
Long term portion of lease liability	$	83,675		$	151,012

Minimum lease payments under the non-cancelable operating lease on December 31, 2022 are as follows:

For the year ended December 31:
2023	$	89,193
2024		92,100
Total		181,293
Less: present value discount		(30,280	)
Total operating lease liability	$	151,013