Quarterly report pursuant to Section 13 or 15(d)

Operating Leases

Operating Leases

9 Months Ended

Sep. 30, 2023

Note 8 – Operating Leases

On November 19, 2021, the Company entered into a sublease with a third party for 4,500 square feet of office space located in Brisbane, California, with a commencement date of January 1, 2022 and maturing on June 30, 2024. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for the lease and non-lease components of its leases as a single lease component. Rent expense is recognized on a straight-line basis over the lease term. As a result of this agreement, the Company recognized right-of-use (“ROU”) asset and liability of $247 pursuant to ASC 842, Leases. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical collateralized borrowing rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives.

On February 8, 2022, the Company entered into a copier lease which will end on February 7, 2025. As a result, the Company recognized additional ROU asset and liability of $13.

As a result of these lease agreements, the Company recognized ROU asset and liability in the aggregate of $260.

Rent expense related to these leases reflected as part of selling, general and administrative expenses on the Company’s Condensed Consolidated Statements of Operations totaled $29 and $88 for the three months and nine months ended September 2023. Rent expense totaled $29 and $58 for the three months and nine months ended September 2022.

Other information related to leases and future minimum lease payments under non-cancellable operating leases were as follows:

	September 30, 2023			September 30, 2022
	(Unaudited)			(Unaudited)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	78		$	79
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	87		$	260
Weighted-average remaining lease term (in years):
Operating leases		0.8			2.0
Weighted-average discount rate:
Operating leases		10	%		10	%

Future minimum lease payments under non-cancellable operating leases were as follows:

	September 30, 2023
	(Unaudited)
Within one year	$	95
After one year and within two years		2
Thereafter		-
Total future minimum lease payments	$	97
Less – discount		(5	)
Lease liability	$	92