Operating Lease

3 Months Ended

Mar. 31, 2022

Operating Lease

Operating Lease

Note 6 – Operating Lease

The Company determines if a contract is, or contains, a lease at contract inception. Operating leases are included in operating lease right-of-use ("ROU") assets, current portion of operating lease liabilities and operating lease liabilities, net of current portion in the Company's consolidated balance sheets. Finance leases are included in property and equipment, current portion of finance lease obligations and finance lease obligations, net of current portion in the Company's audited consolidated balance sheets.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. In addition, ROU assets include initial direct costs incurred by the lessee as well as any lease payments made at or before the commencement date and exclude lease incentives. The Company used the implicit rate in the lease in determining the present value of lease payments. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of one year or less are generally not included in ROU assets and liabilities.

Operating lease ROU assets and operating lease liabilities are recorded on the consolidated balance sheet as follows:

	March 31,
	2022
Operating Lease:
Operating lease right-of-use assets, net	$	86,989
Current portion of operating lease liabilities		47,773
Operating lease liabilities, net of current portion		43,465

As of December 31, 2021, the weighted-average remaining lease term of the operating lease was 1.8 years. The weighted-average discount rate for the operating lease was 6.75%.

The following table summarizes maturities of operating lease liabilities based on lease term as of March 31, 2022:

2022	$	38,945
2023		53,354
2024		4,457
Total lease payments		96,756
Less: Imputed interest		5,518
Present value of lease liabilities	$	91,238

At March 31, 2022, the Company had the following future minimum payments due under the non-cancelable lease:

2022	$	38,945
2023		53,354
2024		4,457
Total minimum lease payments	$	96,756

Consolidated rental expense for all operating leases was $27,611 and $11,663 for the three months ended March 31, 2022 and 2021, respectively.

The following table summarizes the cash paid and related right-of-use operating lease recognized for the three months ended March 31, 2022.

	Three Months Ended
	March 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12,856
Right-of-use lease assets obtained in the exchange for lease liabilities:
Operating leases		11,261