LEASES

3 Months Ended

Mar. 31, 2022

NOTE 9 – LEASES

Leases

The majority of our lease obligations are real estate operating leases from which we conduct our business. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the Consolidated Balance Sheets as either operating or finance leases at the inception of an agreement where it is determined that a lease exists. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expense for these leases on a straight-line basis over the lease term.

Operating lease assets represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We use a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.

The weighted average remaining lease term is 3.77 years and the weighted average discount rate is 12%. Future lease payments under our non-cancellable leases as of March 31, 2022 were as follows:

Schedule of future lease payments Schedule of lease payment
2022	$	134,581
2023		188,267
2024		157,065
2025		161,777
2026		144,347
Total	$	786,037
Imputed interest		(244,538	)
Lease liability	$	541,499

SOLLENSYS CORP. 10-Q