Leases

9 Months Ended

Sep. 30, 2023

Leases

Leases

NOTE 10 - Leases

The Company had four operating leases (Flywheel’s office leases in Taiwan) as of September 30, 2023. The leased assets in Flywheel are presented as right-of-use assets.

The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the operating lease liabilities recorded in the statements of financial position as of September 30, 2023:

	Flywheel			Flywheel			Flywheel			Flywheel
	January 2022 to			June 2022			August 2022			February 2023
Initial lease term	December 2023			to May 2024			to July 2024			to March 2025
Initial recognition of right-of-use assets	$	488,262		$	105,632		$	147,547		$	28,652
Weighted-average remaining lease term at
September 30, 2023		0.3			0.67			0.83			1.42
Weighted-average discount rate at
September 30, 2023		8.11	%		8.11	%		2.50	%		3.20	%

Operating lease liabilities-current as of September 30, 2023 and December 31, 2022 were $171,626 and $385,216, respectively. Operating lease liabilities-non-current as of September 30, 2023 and December 31, 2022 were $5,598 and $64,945, respectively. The right-of-use assets balance as of September 30, 2023 and December 31, 2022, were $195,047 and $450,721, respectively.

For the nine months ended September 30, 2023 and 2022, the amortization of the right-of-use asset was $262,913 and $310,161, respectively.   These amounts were recorded in general and administrative expenses. Additionally, for the nine months ended September 30, 2023 and 2022, the Company made lease payments of $280,333 and $283,244, respectively, which were included in the operating cash flows statement.

The future minimum lease payment schedule for all operating leases as of September 30, 2023, is as disclosed below.

For the Period Ending
September 30,	Amount
2023	$	98,645
2024		79,309
2025		2,331
2026		-
2027 and thereafter		-
Total minimum lease payments		180,285
Less: effect of discounting		(3,061	)
Present value of the future minimum lease payment		177,224
Less: operating lease liabilities-current		(171,626	)
Total operating lease liabilities-non-current	$	5,598

HOUR LOOP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS