NOTE 4 - LEASES

3 Months Ended

Mar. 31, 2022

Notes

NOTE 4 - LEASES

NOTE 4 – LEASES

The Company’s leases consist of an operating lease for general office space and warehouse facilities. The Company recognizes rent expense for this lease on a straight-line basis over the lease term. Because the lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the lease Commencement Date in determining the present value of future lease payments.

On June 3, 2021, the Company entered into a lease for the premises located at 1345 Specialty Drive, Vista, CA, containing approximately 11,751 square feet of rentable area. The lease commenced on July 1, 2021 and expires on June 30, 2026. The monthly base rent under the lease is $9,988 per month and monthly operating expenses during the term of the lease, subject to adjustment under the lease, is $1,175 per month.  

In agreement with the Company’s former landlord, the Company vacated the previous leasehold effective July 15, 2021. As of March 31, 2022 the outstanding balance of back rent, included in accounts payable, was $23,374.

During the quarter ended March 31, 2022, cash paid for amounts included in the measurement of operating lease liabilities was $33,489 and the Company recorded operating lease expenses included in operating expenses of $37,290.

Future minimum payments for monthly base rent due under the initial lease term are currently estimated to be as follows:

Years ending December 31,
2022 (remaining)	$	100,467
2023		141,036
2024		148,074
2025		176,268
2026		88,134
Total lease payments	$	653,979
Less: Imputed interest		(68,915)
Total lease liability		585,064
Less: current lease liability		(109,242)
Long-term lease liability	$	475,822
Weighted average discount rate:
Operating leases		4.94%