General form of registration statement for all companies including face-amount certificate companies

Leases

v3.22.4
Leases
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Disclosure Text Block [Abstract]    
Leases

6. Leases

The Company leases its office and manufacturing facility under a 64-month operating lease expiring April 30, 2024. The lease includes rent escalations and chargebacks to the Company for build-out costs. The right-of-use asset and lease liability amounts were determined using an 8% discount rate which was the interest rate related to the leasehold improvement obligation.

The operating lease includes a leasehold improvement obligation which bears interest at 8% and matures on April 30, 2024. The balance of this obligation was $66,869 and $96,375 as of September 30, 2022, and December 31, 2021, respectively, and is included in operating lease liabilities in the condensed consolidated balance sheets. Total operating lease expense, which is accounted for in cost of revenue on the condensed consolidated statement of operations, was as follows:

 

Three months ended
September 30,

 

Nine months ended
September 30,

   

2022

 

2021

 

2022

 

2021

Fixed lease expense

 

$

71,871

 

$

67,692

 

$

208,506

 

$

206,924

Variable lease expense

 

 

44,508

 

 

44,508

 

 

133,524

 

 

136,310

Total

 

$

116,379

 

$

112,200

 

$

342,030

 

$

343,234

6. Leases

The Company leases its office and manufacturing facility under a 64-month operating lease expiring April 30, 2024. The lease includes rent escalations and chargebacks to the Company for build-out costs. The right-of-use asset and lease liability amounts were determined using an 8% discount rate which was the interest rate related to the leasehold improvement obligation.

The operating lease includes a leasehold improvement obligation of $190,650 which bears interest at 8% and matures on April 30, 2024. The balance of this obligation was $96,375 and $133,070 as of December 31, 2021 and 2020, respectively, and is included in operating lease liabilities in the balance sheets.

Total operating lease expense, which is accounted for in cost of revenue, was as follows:

 

Years ended
December 31,

   

2021

 

2020

Fixed lease expense

 

$

275,485

 

$

348,703

Variable lease expense

 

 

180,818

 

 

192,505

Total

 

$

456,303

 

$

541,208

Future minimum lease payments as of December 31, 2021 were as follows:

2022

 

$

363,551

 

2023

 

 

357,968

 

2024

 

 

120,912

 

Total lease payments

 

 

842,431

 

Less imputed interest

 

 

(21,625

)

Total

 

$

820,806