Operating lease |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating Lease | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating lease |
The Company leases its executive offices. The Company analyzes all leases at inception to determine if a right-of-use (“ROU”) asset and lease liability should be recognized. Leases with an initial term of 12 months or less are not included on the condensed consolidated balance sheets. The ROU asset and lease liability is measured at the present value of future lease payments as of the lease commencement date. The Company accounts for the lease and non-lease components of its leases as a single lease component. Rent expense is recognized on a straight-line basis over the lease term.
On June 1, 2021, the Company relocated its principal executive offices to 3606 Challenger Way, Unit#1, Carson City, Nevada 89706. The lease is for a 4,750 square foot facility under a four-year lease with an independent party ending on May 31, 2025, pursuant to which the Company pursuant to which it pays an average $3,734 per month in rental charges. On June 1, 2021, the Company recognized an operating lease ROU asset and lease liability of $165,000, related to the Nevada operating lease. During the nine months ended September 30, 2021, the Company reflected amortization of the ROU assets of $13,000 related to its Nevada operating lease, resulting in an ROU asset balance of $152,000 as of September 30, 2021.
During the nine months ended September 30, 2021, the Company added $165,000 in lease liabilities related to its Nevada operating lease, and made lease payments of $12,000 towards its operating lease liability. As of September 30, 2021, liabilities under operating leases amounted to $153,000, of which $38,000 is reflected as operating lease liability, current portion.
The lease agreement above have a weighted average remaining lease term of 3.92 years as of September 30, 2021, and the weighted average discount rate for operating leases is 4%. Rent expense for the Nevada operating lease during the three and nine months ended September 30, 2021 and 2020 was $9,000 and $12,000, and $0 and $0, respectively.
Maturities of the Company’s lease liabilities are as follows:
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