LEASES

9 Months Ended

Sep. 30, 2022

Leases

LEASES

10. LEASES

Upon adoption of Topic 842 effective January 1, 2022, the Company recognized operating lease liabilities of $1,776,599 and corresponding right-of-use (“ROU”) assets of $1,837,782. The difference between operating lease liabilities and right-of-use assets recognized is due to prepaid rent and deferred rent recorded under prior lease accounting standards. Topic 842 requires such balances to be reclassified against right-of-use assets at transition. In future periods such balances will not be presented separately.

The components of lease expenses were as follows:

	Nine months ended September 30, 2022
Operating lease cost	$	226,098
Short-term lease cost		12,630
Total lease expenses	$	238,728

The Company has an operating lease for its office lease in Canada with a remaining lease term of seven years. The discount rate was 7.0%. The Company has no finance leases.