Quarterly report pursuant to Section 13 or 15(d)

Note 6 - Lessee Leases

Note 6 - Lessee Leases

9 Months Ended

Sep. 30, 2019

Note 6 - Lessee Leases

Our operating leases are comprised of office space and office equipment leases. Fleet leases entered into prior to January 1, 2019, under ASC 840 guidelines, are classified as operating leases. Fleet leases entered into beginning January 1, 2019, under ASC 842 guidelines, are classified as finance leases.

Gross right of use assets recorded under finance leases related to WCI vehicle fleet leases were $179,933 and $0 as of September 30, 2019 and December 31, 2018, respectively. Accumulated amortization associated with finance leases was $23,583 and $0 as of September 30, 2019 and December 31, 2018, respectively.

Lease costs recognized in our consolidated statements of operations is summarized as follows:

		Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost included in cost of goods	$	51,440	$	142,535
Operating lease cost included in operating costs		14,410		42,698
Total operating lease cost ⁽¹⁾		65,850		185,233
Finance lease cost, included in cost of goods:
Amortization of lease assets		11,140		23,583
Interest on lease liabilities		3,061		5,211
Total finance lease cost		14,201		28,794
Short-term lease cost		8,570		25,310
Total lease cost	$	88,621	$	239,337

⁽¹⁾ Right of use asset amortization under operating agreements was $49,804 for the three months ended September 30, 2019 and $143,571 for the nine months ended September 30, 2019.

Other information about lease amounts recognized in our condensed consolidated financial statements is summarized as follows:

	September 30, 2019
Weighted-average remaining lease term operating leases	2.0 years
Weighted-average remaining lease term finance leases	3.4 years
Weighted-average discount rate operating leases	10.1%
Weighted-average discount rate finance leases	9.0%

As of September 30, 2019, our lease liabilities were as follows:

		Finance Leases		Operating Leases		Total
Gross lease liabilities	$	197,391	$	426,652	$	624,043
Less: imputed interest		(56,798)		(42,426)		(99,224)
Present value of lease liabilities		140,593		384,226		524,819
Less: current portion		(35,653)		(191,491)		(227,144)
Long-term lease liabilities	$	104,940	$	192,735	$	297,675