OPERATING LEASE

6 Months Ended

Jun. 30, 2022

Operating Lease

OPERATING LEASE

NOTE 9: OPERATING LEASE

On May 19, 2021, the Company signed an 18-month lease for office premises in California located at 1 Technology Drive, Bldg. B, Irvine, CA 92618, Suite no. B123 occupying approximately 6,498 square feet of usable space.  The terms of the lease provide for basic monthly rent in the first year of approximately $9,097 per month, and $9,487 for each of the remaining six months. In addition, the tenant is responsible for their share of operating expenses, utilities and services. On February 4, 2022, the Company signed a first amendment to the lease agreement to extend the lease term to November 30, 2027. The terms of the lease provide for basic monthly rent starting in December 2022 of approximately $10,592, with annually increasing around 4%. In addition, the tenant is responsible for their share of operating expenses, utilities and services. As a result of the adoption ASU No. 2016-02 – Topic 842 Leases, the Company recognized a lease liability and right-to-use asset of approximately $645,440, which represented the present value of the remaining minimum lease payments using an estimated incremental borrowing rate of 6.75% on January 1, 2022. 

Future minimum lease payments in respect of the above leases as of June 30, 2022, as presented in accordance with ASC 842 were as follows:

2022		58,027
2023		127,556
2024		133,014
2025		138,472
2026		143,931
Remaining periods		136,527
Total future minimum lease payments		737,527
Less: imputed interest		(125,740	)
Total		611,787
Current portion of operating lease		82,701
Long term portion of operating lease	$	529,086