Operating Leases

6 Months Ended

Jun. 30, 2023

Operating Leases

Operating Leases

9)    Operating Leases

The Company has commitments under operating leases for office and warehouse space used in its operations. The Company’s leases have remaining lease terms ranging from 1.2 years to 3.5 years.

On November 30, 2021, the Company entered into a sublease with respect to its entire headquarters facility. The sublessor delivered a $14,000 security deposit to the Company on the lease commencement date and also agreed to pay $7,000 per month for the term beginning January 10, 2022 and continuing until the expiration of the head lease on August 30, 2024. The Company accounts for this sublease as an operating lease in accordance with the lessor accounting guidance within ASC 842.

The components of lease expense consisted entirely of fixed lease costs related to operating leases. These costs were $89,623 and $89,623 for the six months ended June 30, 2023 and 2022, respectively, and were $44,812 and $44,812 for the three months ended March 31, 2023 and 2022, respectively. Fixed lease costs for the six months ended June 30, 2023 were offset by sublease income of $42,000, and $21,000 for the three months ended March 31, 2023.

Supplemental balance sheet information related to leases was as follows:

	As of June 30, 2023		As of December 31, 2022
Operating lease ROU asset:
Other assets	$	294,391	$	358,471
Operating lease liability:
Other current liabilities		152,780		142,340
Other long-term liabilities		183,328		262,677
Total operating lease liability	$	336,108	$	405,017

Supplemental lease term and discount rate information related to leases was as follows:

	As of June 30, 2023		As of December 31, 2022
Weighted-average remaining lease terms - operating leases	2.2 years		2.7 years
Weighted-average discount rate - operating leases	12.6	%	12.6	%

Supplemental cash flow information related to leases was as follows:

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2023		2022		2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	47,226	$	46,935	$	94,451	$	93,870

Future minimum lease payments under non-cancelable leases as of June 30, 2023, were as follows:

Lease Liability Maturity Analysis	Operating Leases
2023 (remaining 6 months)	$	94,922
2024		155,242
2025		81,107
2026		82,324
Thereafter		—
Total lease payments		413,595
Less: Imputed Interest		(77,487)
Total	$	336,108

Future minimum sublease income under non-cancelable leases as of June 30, 2023, were as follows:

Sublease income	Operating Leases
2023 (remaining 6 months)		42,000
2024		56,000
Total	$	98,000

As of June 30, 2023, the Company had no operating leases that had not yet commenced.