OPERATING LEASES

3 Months Ended

Mar. 31, 2023

Operating Leases

OPERATING LEASES

NOTE 7 - OPERATING LEASES

The Company periodically enters operating lease contracts for office space and equipment. Arrangements are evaluated at inception to determine whether such arrangements constitute a lease. Right of use assets (“ROU assets”) represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities were recognized on the transition date based on the present value of lease payments over the respective lease term, with the office space ROU asset adjusted for deferred rent liability.

The Company has three material operating leases for office space. In March 2023, the Company amended its primary office lease to obtain additional space, as well as extend the term. The leases have remaining lease terms of 93, 46 and 29 months as of March 31, 2023. For practical expediency, the Company has elected to not recognize ROU assets and lease liabilities related to short-term leases.

In accordance with ASC Topic 842, Leases, the Company has recorded ROU assets of $2,099,021 and a related lease liability of $2,112,570 as of March 31, 2023. The Company recorded lease expense of $88,419 for the three months ended March 31, 2023 for its leased assets and $63,407 for the three months ended March 31, 2022. Cash paid for amounts included in the measurement of operating lease liabilities was $87,691 for the three months ended March 31, 2023 and $63,889 for the three months ended March 31, 2022. The present value of the Company’s operating lease liabilities as of March 31, 2023 is shown below.

Maturity of Operating Lease Liabilities

	March 31, 2023
Remainder of 2023	$	266,473
2024		424,753
2025		450,551
2026		365,911
2027		297,947
2028		295,689
Thereafter		604,050
Total lease payments		2,705,374
Less imputed interest		(592,804	)
Present Value of Lease Liabilities	$	2,112,570
Operating lease liabilities – current		253,381
Operating lease liabilities – long-term		1,859,189

As of March 31, 2023, the Company’s operating leases had a weighted average remaining lease term of 6.6 years and a weighted average discount rate of 7.49%.