LEASES

12 Months Ended

Dec. 31, 2023

Note 17

LEASES

Operating Leases

The Company accounts for leases in accordance with ASC Topic 842, Leases (“ASC 842”). All contracts are evaluated to determine whether or not they represent a lease. A lease conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company has operating leases primarily consisting of facilities with remaining lease terms of 1-5 years. The lease term represents the period up to the early termination date unless it is reasonably certain that the Company will not exercise the early termination option. Certain leases include rental payments that are adjusted periodically based on changes in consumer price and other indices.

Leases are classified as finance or operating in accordance with the guidance in ASC 842. The Company does not hold any finance leases.

The Company is obligated under two short-term leases related to offices in Pennsylvania and Massachusetts. These short-term leases are currently leased on a month-to-month basis. A short-term lease is a lease with a term of 12 months or less and does not include the option to purchase the underlying asset that the Company would expect to exercise. The Company has elected to adopt the short-term lease exemption in ASC 842 and as such has not recognized a “right of use” asset or lease liability for these short-term leases.

The Company’s lease agreements generally do not provide an implicit borrowing rate; therefore an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments.

Supplemental cash flow information and non-cash activity related to leases are as follows:

	For the Years Ended December 31,
	2023		2022
Cash used in operating leases	$	22,374	$	1,800

ROU lease assets and lease liabilities for the Company’s operating leases were recorded in the consolidated balance sheet as follows:

	December 31, 2023		December 31, 2022
Right of use assets, net	$	10,664	$	32,560

Short-term operating lease liabilities	$	10,664	$	21,600
Long-term operating lease liabilities		—		—
Total lease liabilities	$	10,664	$	21,600
Weighted average remaining lease term (in years)		0.50		1.48
Weighted average discount rate		9.5%		9.3%

The components of lease expense were as follows for each of the periods presented, which are included in operating expenses in the consolidated statements of operations:

	For the Years Ended December 31,
	2023		2022
Operating lease expense	$	22,374	$	1,800
Short-term lease expense		27,833		46,693
Total operating lease costs	$	50,207	$	48,493

Future lease payments included in the measurement of lease liabilities on the consolidated balance sheet as of December 31, 2023, were as follows:

	December 31, 2023
2024	$	10,962
Less imputed interest		(298	)
Total	$	10,664