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Leases

3 Months Ended

Mar. 31, 2022

5. Leases

The Company accounts for leases in accordance with ASC Topic 842. In March 2021, the Company renewed its office lease with Marlenko Acquisitions, LLC. The new two-year lease is identical to the previous lease and expires on February 28, 2023 with a one-year option to renew. The right-of-use asset and operating lease liability at the execution of this lease totaled $235,335. The Company used its incremental borrowing rate of 5.25% for all operating leases as of March 31, 2022 and December 31, 2021.

Office lease – On March 1, 2021, the Company entered into a two (2) year lease for an office facility located in Miami Florida with an entity controlled by our CEO and related parties. The lease has a one-time renewal option for one year which management is reasonably certain will be exercised. The lease is $7,450 per month and expires in February 2024, including the renewal option (see Note 12).

Secure facility lease – On September 11, 2017, the Company entered into a five (5) year lease for a secure facility located in Miami Florida. The lease has a no renewal option. The lease is $1,233 per month and expires in August 2022.

Copier lease – On October 14, 2019 the Company entered into a copier lease. The right to use asset and lease liability at inception of the copier lease was $68,799. The Company used its incremental borrowing rate of 5.25% to determine the present value of the lease payment. The cost of the copier lease is $1,116 per month and expires October 14, 2024 with a one-year renewal option which the Company expects to exercise.

Server lease – On December 7, 2021, the Company entered into a five-year lease for computer hardware. The lease contains a bargain purchase option, which the Company intends to exercise. The Company recorded this lease as a finance lease. The fixed asset and lease liability at inception of the lease was $66,281 and $65,801, respectively. The Company used its incremental borrowing rate of 5.25% to determine the present value of the lease payment. The lease payments are $1,249 per month through December 2026.


		March 31,
		2022		December 31,
Leases	Classification	(unaudited)		2021

Right-of-use assets	Operating lease assets	$	203,655	$	228,954
Server lease	Finance lease assets		61,862		65,176
Total lease assets		$	265,517	$	294,130

Current operating lease liability	Current operating lease liabilities	$	102,547	$	104,880
Non-current operating lease liability	Long-term operating lease liabilities		101,108		124,074
Total operating lease liabilities		$	203,655	$	228,954

Current finance lease liability	Current finance lease liabilities	$	12,013	$	11,857
Non-current finance lease liability	Long-term finance lease liabilities		49,991		53,053
Total finance lease liabilities		$	62,004	$	64,910

The weighted-average remaining lease term was 2.80 years and 2.99 years as of March 31, 2022 and December 31, 2021, respectively. For the three months ended March 31, 2022 and 2021, the total lease cost was $28,193 and $28,997, respectively.