Quarterly report pursuant to Section 13 or 15(d)

LEASES

v3.23.2
LEASES
6 Months Ended
Jun. 30, 2023
Leases [Abstract]  
LEASES
NOTE 4 – LEASES
 
On January 3, 2017, the Company executed a non-cancellable operating lease for its principal office with the lease commencing February 1, 2017 for a five (5) year term. The Company paid a security deposit of $29,297. The lease required the Company to pay its proportionate share of direct costs estimated to be 22.54% of the total property, a fixed monthly direct cost of $6,201 for each month during the term of the lease, and monthly rental pursuant to the lease terms. This lease expired during February 2022.
 
In December 2019,
the Company entered a lease for office space located
at 8669 Research Drive,  Irvine, CA, 92618 to replace the Company’s then current corporate headquarters. The lease commenced on December 1, 2019 with no rent due until April 1, 2020. From April 1, 2020 through March 31, 2025, base rent is due on the first of each month in the amount of $25,200 escalating annually on December 1
st
of each year to $29,480 beginning December 1, 2023. The Company paid an initial amount of $68,128 comprising the rent for April 2020, a security deposit and the amount due for property taxes, insurance and association fees.
 
In addition, the Company entered into two leases for additional space in Irvine, CA. The leases commenced March 1, 2022 and June 1, 2022. Base rent is initially $16,250 and $48,379 with escalations contained in the lease through February 28, 2027 and May 31, 2027.

The Company also leases space in the United Kingdon. The lease expires January 1, 2027,with monthly payments of approximately $41,000.

Supplemental balance sheet information related to leases is as follows as of June 30, 2023:
 
Operating leases
 
 
 
 
Right-of-use assets, net
 
$
4,386,414
 
 
 
 
 
 
Current liabilities
 
 
1,182,351
 
Non-current liabilities
 
 
3,383,967
 
     Total operating lease liabilities
 
$
4,566,318
 
 
 
 
 
 
Weighted Average Remaining Lease Term
 
 
3.56 years
 
 
 
 
 
 
Weighted Average Discount Rate
 
 
4%
 
 
As the leases do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments, which is reflective of the specific term of the leases and economic environment of each geographic region.   
 
Anticipated future lease costs are as follows:
 
For the years ending  
December 31,
 
 
Building
leases
 
 
2023 (remaining)
 
$
743,835
 
2024
 
 
1,481,667
 
2025
 
 
1,245,379
 
2026
 
 
1,211,105
 
2027
 
 
333,915
 
Total lease payments
 
 
5,015,901
 
Less: imputed interest
 
 
449,583
 
Present value of lease liabilities
 
$
4,566,318
 
 
 
The Company recorded rent expense of $1,011,891 and $457,906 for the six months ended June 30, 2023 and 2022, respectively. The Company recorded rent expense of $684,017 and $244,252 for the three months ended June 30, 2023 and 2022, respectively.