Operating Leases

9 Months Ended

Sep. 30, 2022

Operating Leases [Abstract]

OPERATING LEASES

NOTE 8 – OPERATING LEASES

The Company entered into a Lease Agreement (the “Lease”) with 14175 Icot Blvd, LLC (the “Lessor”), effective May 1, 2022, relating to approximately 9,677 square feet of property located at 14175 Icot Blvd, Clearwater, FL 33760. The term of the Lease is for thirty-six (36) months commencing May 1, 2022. The monthly base rent, including tax is $8,686.71 for the first twelve (12) months increasing thereafter to $9,034.17 for the next 12 months and to $12,287.63 for the last 12 months. The Company paid $69,494 of advanced rent. The advance rent is to be allocated equally over the first two years of the lease.

In February 2016, the FASB issued Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842), which superseded guidance in ASC 840, Leases, which we adopted for the year ended December 31, 2019, under the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application. We account for short-term leases, those lasting fewer than 12 months, using the practical expedient as outlined in the guidance, which does not include recording such leases on the balance sheet.

Adoption of Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842), resulted in recording an initial right-of-use (“ROU”) assets and operating lease liabilities of $328,803 on May 1, 2022.

Asset	Balance Sheet Classification	September 30, 2022
Operating lease asset	Right of use asset	$	283,136
Total lease asset		$	283,136
Liability
Operating lease liability – current portion	Current operating lease liability	$	90,824
Operating lease liability – noncurrent portion	Long-term operating lease liability		202,412
Total lease liability		$	293,236

Lease obligations at September 30, 2022 consisted of the following:

For the year ended December 31:
2022	$	28,861
2023		107,020
2024		134,438
2025		49,151
Total payments	$	319,470
Amount representing interest	$	(26,234	)
Lease obligation, net		293,236
Less current portion		(90,824	)
Lease obligation – long term	$	202,412

The lease expense for the above agreement for the nine months ended September 30, 2022 was $51,160 which consisted of amortization expense of $41,828 and interest expense of $9,332.