Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.23.3
Leases
9 Months Ended
Sep. 30, 2023
Leases [Abstract]  
Leases

Note 7 — Leases

 

Since inception, the Company has entered into three leases for office suites in California, two were short-term and one lease was long-term and expires in 2024. Termination of the lease is prohibited unless there is a violation under the lease agreement. The lease has escalating payments from $15,538 per month to $16,719 per month. In determining the length of the lease term, the Company determined there was no embedded extension option. At lease commencement date, the Company estimated the lease liability and the right-of-use assets at present value using the Company’s estimated incremental borrowing rate of 10.5%

 

Additionally, in October 2023, the Company has entered into a new sublease in Florida, which will become the new headquarters (see Note 15).

 

Rent expense under the operating leases included in the results of operations, inclusive of common area maintenance charges and real estate taxes, was $108,827 and $29,589 for the three months ended September 30, 2023 and 2022, respectively and $220,895 and $72,131 for the nine months ended September 30, 2023 and 2022, respectively.

 

The following amounts were recorded in the Company’s condensed consolidated balance sheets relating to its operating lease and other supplemental information:

 

    September 30,
2023
    December 31,
2022
 
ROU assets   $ 164,304     $ 293,520  
Lease liabilities:                
Current lease liabilities   $ 168,608     $ 169,275  
Non-current lease liabilities    
-
      129,762  
Total lease liabilities   $ 168,608     $ 299,037  
Other supplemental information:                
Weighted average remaining lease term     0.92 years       2 years  
Weighted average discount rate     10.50 %     10.50 %

 

The following table presents the lease payments relating to the Company’s operating leases:

 

Fiscal Year   September 30, 2023     December 31,
2022
 
Remainder of 2023   $ 48,013     $ 191,183  
2024     128,035       133,753  
Total lease payments     176,048       324,936  
Less: imputed interest     (7,440 )     (25,899 )
Present value of operating lease liabilities   $ 168,608     $ 299,037