Quarterly report pursuant to Section 13 or 15(d)

OPERATING LEASE

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OPERATING LEASE
9 Months Ended
Sep. 30, 2021
Operating Lease  
OPERATING LEASE

NOTE 4 - OPERATING LEASE

 

At September 30, 2021, the Company has one operating lease for its headquarters office space in Burbank. The lease commenced on January 1, 2020, and has a term for 5 years, with annual fixed rental payments ranging from $90,000 to $101,296. At September 30, 2021, the balance of the lease’s right of use asset and corresponding lease liability were $300,483 and $336,185, respectively. At September 30, 2021, the Company is also obligated under a lease that was abandoned in December 2020. The total due to the lessor for the abandoned lease space is $235,759 and is recorded as lease settlement obligation at September 30, 2021.

 

The components of lease expense and supplemental cash flow information related to leases for the period are as follows:

 

   

Nine months ended

September 30, 2021

 
       
Lease Cost        
Operating lease cost (included in selling, general, and administrative expense in the Company’s statement of operations)   $ 95,586  
         
Other Information        
Cash paid for amounts included in the measurement of lease liabilities for 2021   $ 93,165  
Weighted average remaining lease term – operating leases (in years)     2.50  
Average discount rate – operating leases     4 %

 

 

    At September 30, 2021  
Operating leases        
Long-term right-of-use assets   $ 300,483  
         
Short-term operating lease liabilities   $ 105,443  
Long-term operating lease liabilities     230,742  
Total operating lease liabilities   $ 336,185  

 

Maturities of the Company’s lease liabilities are as follows:

 

Year Ending   Operating Leases  
2021(remainder of year)     26,286  
2022     95,481  
2023     98,345  
2024     139,767  
Total lease payments     359,879  
Less: Imputed interest     (23,694 )
Present value of lease liabilities     336,185  
         
Less current portion     (105,443 )
Operating lease liabilities, long-term   $ 230,742  

 

 

Lease expense was $95,586 and $171,333 during the nine months ended September 30, 2021 and 2020, respectively.