OPERATING LEASES

9 Months Ended

Sep. 30, 2024

Operating Leases

OPERATING LEASES

NOTE 7 – OPERATING LEASES

The Company periodically enters operating lease contracts for office space and equipment. Arrangements are evaluated at inception to determine whether such arrangements constitute a lease. Right of use assets (“ROU assets”) represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities were recognized on the transition date based on the present value of lease payments over the respective lease term, with the office space ROU asset adjusted for deferred rent liability.

The Company has three material operating leases for office space. In March and September of 2023, the Company amended its primary office lease to obtain additional space, as well as extend the term. The leases have remaining lease terms of 75, 11 and 28 months as of September 30, 2024. For practical expediency, the Company has elected to not recognize ROU assets and lease liabilities related to short-term leases.

In accordance with ASC Topic 842, Leases, the Company has recorded ROU assets of $1,688,963 and a related lease liability of $1,846,293 as of September 30, 2024. The Company recorded lease expense of $121,126 and $110,693 for the three months ended September 30, 2024 and 2023, respectively. The Company recorded lease expense of $416,394 and $295,268 for the nine months ended September 30, 2024 and 2023, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $362,491 and $264,291 for the nine months ended September 30, 2024 and 2023, respectively.

The present value of the Company’s operating lease liabilities as of September 30, 2024 is shown below:

Maturity of Operating Lease Liabilities

	September 30, 2024
Remainder of 2024	$	142,525
2025		532,053
2026		379,529
2027		297,947
2028		295,689
2029		300,158
Thereafter		303,892
Total lease payments		2,251,793
Less imputed interest		(405,500	)
Present Value of Lease Liabilities	$	1,846,293
Operating lease liabilities – current	$	439,129
Operating lease liabilities – long-term	$	1,407,164

As of September 30, 2024, the Company’s operating leases had a weighted average remaining lease term of 5.4 years and a weighted average discount rate of 7.66%.