Annual report pursuant to Section 13 and 15(d)

Note 6 - Lessee Leases

Note 6 - Lessee Leases

12 Months Ended

Dec. 31, 2019

Note 6 Lessee Leases

Our operating leases are comprised of office space and office equipment leases. Fleet and vehicle 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 $206,332 and $0 as of December 31, 2019 and 2018, respectively. Accumulated amortization associated with finance leases was $36,640 and $0 as of December 31, 2019 and 2018, respectively.

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

		Year Ended December 31, 2019
Operating lease cost included in cost of goods	$	205,015
Operating lease cost included in operating costs		56,881
Total operating lease cost		261,896
Finance lease cost, included in cost of goods:
Amortization of lease assets		36,640
Interest on lease liabilities		9,640
Total finance lease cost		46,280
Short-term lease cost		34,280
Total lease cost	$	342,456

Right of use asset amortization under operating agreements was $214,030 for the year ended December 31, 2019.

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

	December 31, 2019
Weighted-average remaining lease term operating leases	1.73 years
Weighted-average remaining lease term finance leases	3.25 years
Weighted-average discount rate operating leases	10.2%
Weighted-average discount rate finance leases	9.0%

As of December 31, 2019, our lease liabilities were as follows:

		Finance Leases		Operating Leases		Total
Gross lease liabilities	$	208,641	$	356,958	$	565,599
Less: imputed interest		(54,548)		(31,622)		(86,170)
Present value of lease liabilities		154,093		325,336		479,429
Less: current portion		(41,675)		(184,436)		(226,111)
Long-term lease liabilities	$	112,418	$	140,900	$	253,318