Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

6. Leases

The Company accounts for leases in accordance with ASC Topic 842. In March 2021, the Company renewed its office lease with Marlenko Acquisitions, LLC. The new two-year lease is identical to the previous lease and expires on February 28, 2023 with a one-year option to renew. The right-of-use asset and operating lease liability at the execution of this lease totaled $235,335. The Company used its incremental borrowing rate of 5.25% for all operating leases as of December 31, 2022 and December 31, 2021. In September 2022, the Company renewed its secure facility lease as described below. In September 2022, the Company also entered into a new lease agreement for computer hardware as described below.

Office lease – On March 1, 2021, the Company entered into a two (2) year lease for an office facility located in Miami Florida with an entity controlled by our CEO and related parties. The lease has a one-time renewal option for one year which management is reasonably certain will be exercised. The lease is $7,048 per month and expires in February 2024, including the renewal option (see Note 15).

Secure facility lease – On September 11, 2017, the Company entered into a five (5) year lease for a secure facility located in Miami Florida. The lease had no renewal option. The lease was $1,233 per month and expired in August 2022. On September 26, 2022, the Company entered into a three (3) year lease for a secure facility located in Miami, Florida. The lease has no renewal option. The lease is $1,418 per month, with payment increases of 4% annually, and expires in September 2025. The right-of-use asset and operating lease liability at the execution of this lease totaled $48,979.

Copier lease – On October 14, 2019 the Company entered into a copier lease. The right to use asset and lease liability at inception of the copier lease was $68,799. The Company used its incremental borrowing rate of 5.25% to determine the present value of the lease payment. The cost of the copier lease is $1,116 per month and expires October 14, 2024 with a one-year renewal option which the Company expects to exercise.

Hardware lease – On September 30, 2022, the Company entered into a three-year lease for computer hardware. The lease has no renewal option. The lease is $664 per month and expires in September 2025. The right-of-use asset and operating lease liability at the execution of this lease totaled $22,059.

Server lease – On December 7, 2021, the Company entered into a five-year lease for a computer server. The lease contains a bargain purchase option, which the Company intends to exercise. The Company recorded this lease as a finance lease. The fixed asset and lease liability at inception of the lease was $66,281 and $65,801, respectively. The Company used its incremental borrowing rate of 5.25% to determine the present value of the lease payment. The lease payments are $1,249 per month through December 2026.

Maturities of lease liabilities as of December 31, 2022 were as follows:

2023	$	138,109
2024		68,308
2025		45,918
2026		13,879
Total lease payments		266,214
Less: imputed interest		(16,754	)
Present value of lease liabilities	$	249,460

Supplemental balance sheet information related to leases is as follows:

Leases	Classification	December 31, 2022		December 31, 2021
Right-of-use assets	Operating lease assets	$	196,407	$	228,954
Server lease	Finance lease assets		51,920		65,176
Total lease assets		$	248,327	$	294,130
Current operating lease liability	Current operating lease liabilities	$	122,554	$	104,880
Non-current operating lease liability	Long-term operating lease liabilities		73,853		124,074
Total operating lease liabilities		$	196,407	$	228,954
Current finance lease liability	Current finance lease liabilities	$	12,494	$	11,857
Non-current finance lease liability	Long-term finance lease liabilities		40,559		53,053
Total finance lease liabilities		$	53,053	$	64,910

The weighted-average remaining lease term was 2.40 years and 2.99 years as of December 31, 2022 and December 31, 2021, respectively. For the years ended December 31, 2022 and 2021, the total operating lease costs was $114,086 and $113,577, respectively. As of December 31, 2022 and 2021, operating lease payments include $97,978 and $97,978, respectively, of cost related to options to extend lease terms that are reasonably certain of being exercised.