Quarterly report pursuant to Section 13 or 15(d)

Operating Lease

Operating Lease

9 Months Ended

Sep. 30, 2022

Operating Lease

The Company leases certain corporate office space under an operating lease agreement. We determine if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in lease arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The lease expires May 31, 2025 and requires base rent ranging from $3,563 to $3,893 per month.

The components of lease expense and supplemental cash flow information related to leases are as follows:

Schedule of components of lease expense
	September 30,
	2022

Lease costs:
Operating lease (included in general and administrative in the Company’s consolidated statement of operations)	$	–

Other information:
Cash paid for amounts included in the measurement of lease liabilities	$	26,000

Weighted average remaining lease term – operating leases (in years)		2.6
Average discount rate – operating leases		4%

The supplemental balance sheet information related to leases for the period is as follows:
Long-term right-of-use assets	$	116,000

Short-term operating lease liabilities		41,000
Long-term operating lease liabilities		77,000
Total operating lease liabilities	$	118,000

Future minimum lease payments under operating leases as of September 30, 2022 are as follows:

Schedule of lease maturities
Year ending December 31,	Amount
2022 (remainder of year)	$	11,000
2023		45,000
2024		46,000
2025		19,000
Total minimum lease payments		121,000
Less: interest		(3,000	)
Present value of lease liabilities	$	118,000