Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

Commitments and Contingencies
3 Months Ended
Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

(9) Commitments and Contingencies




The Company is subject to litigation claims arising in the ordinary course of business. The Company records litigation accruals for legal matters which are both probable and estimable and for related legal costs as incurred. The Company does not reduce these liabilities for potential insurance or third-party recoveries. As of March 31, 2022, and December 31, 2021, the Company is not aware of any litigation, pending litigation, or other transactions that would require accrual or disclosure under GAAP.


Lease Commitment


On December 3, 2021, the Company signed a lease for 5778 square feet of office space, for occupancy

effective January 1, 2022. The lease term is 39 months and the total monthly payment is $21,773, including base rent, estimated operating expenses and sales tax. The base rent of $14,743 including sales tax was abated for months 1, 13 and 25 of the lease and is subject to a 3% increase. An initial Right of Use (“ROU”) asset of $735,197 was recognized as a non-cash asset addition with the adoption of the lease accounting standard. Cash paid for amounts included in the present value of operating lease liabilities was $50,577 for the quarter ended March 31, 2022, and is included in cash flows from operating activities in the accompanying consolidated statement of cash flows. The operating lease expense for this lease was $61,444 for the quarter ended March 31, 2022 and is included in operating expenses in the consolidated statements of operations.


Future minimum payments under non-cancellable leases as of March 31, 2022 were as follows:


Future Minimum Payments      
2022 (April 1 to December 31)   $ 195,961  
2023     251,403  
2024     256,414  
2025     69,421  
Total undiscounted operating leases payments     773,199  
Less: Imputed interest     54,621  
Present Value of Operating Lease Liabilities     718,578  
Other Information        
Weighted-average remaining lease term     3.0 years  
Weighted-average discount rate     5.0%


As a practical expedient, short-term leases with an initial term of 12 months or less are excluded from the consolidated balance sheets and charges from these leases are expensed as incurred. The Company has offices at several of its operations locations under leases that are cancellable upon short notice. Total rent expense for these leases (including the prior headquarters office) was $36,852 and $9,227 for the quarters ended March 31, 2022 and 2021, respectively.