Operating Lease Right-of-Use Asset and Operating Lease Liability

9 Months Ended

Sep. 30, 2024

Operating Lease Right-of-Use Asset and Operating Lease Liability [Abstract]

Operating lease right-of-use asset and operating lease liability

3. Operating lease right-of-use asset and operating lease liability

The Company entered into a lease agreement commencing on December 1, 2020 through August 31, 2027, for 2,275 square feet of office space located at 1400 Old Country Road, Suite 304, Westbury, New York, 11590. The following table illustrates the base monthly rent amounts over the remaining term of the lease:

	Base
Rent Periods	Rent
September 1, 2024 to August 31, 2025	$	5,891
September 1, 2025 to August 31, 2026	$	6,048
September 1, 2026 to August 31, 2027	$	6,210

The Company entered into a lease agreement commencing on July 1, 2023 through September 30, 2026 for 2,153 square feet of office space located at One Dupont Street, Suite 112, Plainview, New York, 11803. On April 5, 2024 the Company entered into a Settlement and release agreement in the amount of $6,100, in addition to the Landlord retaining the security deposit of $5,250. 

The Company has an equipment lease commencing on December 1, 2023 through December 1, 2026. The contract requires payments of $158 per month. Operating lease right-of-use asset and liability are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 7.5%, as the interest rate implicit in most of our leases is not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term. Since the common area maintenance expenses are expenses that do not depend on an index or rate, they are excluded from the measurement of the lease liability and recognized in other general and administrative expenses on the statements of operations. During the nine months ended September 30, 2024 and 2023, the Company recorded $71,632 and $90,618, respectively, in rent expense. During the three months ended September 30, 2024 and 2023, the Company recorded $23,721 and $28,892, respectively, in rent expense.

Operating lease right-of-use asset and liability are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 7.5% as the interest rate implicit in most of our leases is not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term. Since the common area maintenance expenses are expenses that do not depend on an index or rate, they are excluded from the measurement of the lease liability and recognized in other general and administrative expenses on the statements of operations.

Right-of-use asset is summarized below:

	September 30,			December  31,
	2024			2023
Office lease	$	371,832		$	371,832
Equipment lease		3,773			5,676
Less: accumulated amortization		(193,001	)		(153,192	)
Right-of-use asset, net	$	182,604		$	224,316

Operating lease liability is summarized below:

	September 30,			December 31,
	2024			2023
Office lease	$	189,157		$	229,433
Equipment lease		4,301			5,676
Less: current portion		(62,524	)		(59,765	)
Long term portion		130,934			175,344

Maturity of the lease liability is as follows:

	September 30,
	2024
Fiscal year ending December 31, 2024	$	21,580
Fiscal year ending December 31, 2025		71,323
Fiscal year ending December 31, 2026		73,223
Fiscal year ending December 31, 2027		49,677
		215,803
Present value discount		(22,345	)
Lease liability	$	193,458