Leases

9 Months Ended

Sep. 30, 2021

Leases

Leases

Note 8 – Leases

The Company has various operating lease agreements in place for its office and joint ventures. Per FASB’s ASU 2016-02, Leases Topic 842 (“ASU 2016-02”), effective January 1, 2019, the Company is required to report a right-of-use asset and corresponding liability to report the present value of the total lease payments, with appropriate interest calculation. Per the terms of ASU 201-02, the Company can use its implicit interest rate, if known, or applicable federal rate otherwise. Since the Company’s implicit interest rate was not readily determinable, the Company utilized the applicable federal rate, as of the commencement of the lease. Lease renewal options included in any lease are considered in the lease term if it is reasonably certain the Company will exercise the option to renew. The Company’s operating lease agreements do not contain any material restrictive covenants.

As of September 30, 2021, the Company’s lease components included in the consolidated balance sheet were as follows:

Lease component	Balance sheet classification	September 30, 2021
Assets
ROU assets - operating lease	Other assets	$	1,391,228
Total ROU assets		$	1,391,228
Liabilities
Current operating lease liability	Current liabilities	$	107,513
Long-term operating lease liability	Other liabilities		1,327,693
Total lease liabilities		$	1,435,206

Future minimum lease payments as of September 30, 2021 were as follows:

2021	$	33,860
2022		137,388
2023		140,668
2024		125,762
2025 and beyond		1,193,694
Total future minimum lease payments	$	1,631,372
Less: Interest		(196,166	)
Total operating lease liabilities	$	1,435,206

INVO BIOSCIENCE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(UNAUDITED)