Quarterly report pursuant to Section 13 or 15(d)

Leases

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Leases
9 Months Ended
Sep. 30, 2022
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     Nine months ended  
    September 30,     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