| Note 6 - Lessee Leases |
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, 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 $371,345 and $206,332 as of September 30, 2020 and December 31, 2019, respectively. Accumulated amortization associated with finance leases was $87,416 and $36,640 as of September 30, 2020 and December 31, 2019, respectively.
Lease costs recognized in our consolidated statements of operations is summarized as follows:
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Operating lease cost included in cost of goods |
$ |
35,581 |
$ |
51,440 |
$ |
120,153 |
$ |
142,535 |
Operating lease cost included in operating costs |
|
13,846 |
|
14,410 |
|
41,965 |
|
42,698 |
Total operating lease cost (1) |
|
49,427 |
|
65,850 |
|
162,118 |
|
185,233 |
Finance lease cost, included in cost of goods: |
|
|
|
|
|
|
|
|
Amortization of lease assets |
|
19,349 |
|
11,140 |
|
50,776 |
|
23,583 |
Interest on lease liabilities |
|
4,719 |
|
3,061 |
|
12,689 |
|
5,211 |
Total finance lease cost |
|
24,068 |
|
14,201 |
|
63,465 |
|
28,794 |
Short-term lease cost |
|
5,980 |
|
8,570 |
|
23,920 |
|
25,310 |
Total lease cost |
$ |
79,475 |
$ |
88,621 |
$ |
249,503 |
$ |
239,337 |
(1)Right of use asset amortization under operating agreements was $45,707 and $49,804 for the three months ended September 30, 2020 and 2019, respectively. Right of use asset amortization under operating agreements was $141,429 and $143,571 for the nine months ended September 30, 2020 and 2019, respectively.
Other information about lease amounts recognized in our condensed consolidated financial statements is summarized as follows:
|
September 30,
2020
|
|
December 31,
2019
|
Weighted-average remaining lease term operating leases |
1.13 years |
|
1.73 years |
Weighted-average remaining lease term finance leases |
3.50 years |
|
3.25 years |
Weighted-average discount rate operating leases |
10.1% |
|
10.2% |
Weighted-average discount rate finance leases |
8.4% |
|
9.0% |
Finance lease liabilities were as follows:
|
|
September 30,
2020
|
|
December 31,
2019
|
Gross finance lease liabilities |
$ |
301,499 |
$ |
208,641 |
Less: imputed interest |
|
(43,880) |
|
(54,548) |
Present value of finance lease liabilities |
|
257,619 |
|
154,093 |
Less: current portion |
|
(71,616) |
|
(41,675) |
Long-term finance lease liabilities |
$ |
186,003 |
$ |
112,418 |
Operating lease liabilities were as follows:
|
|
September 30,
2020
|
|
December 31,
2019
|
Gross operating lease liabilities |
$ |
210,036 |
$ |
356,958 |
Less: imputed interest |
|
(26,695) |
|
(31,622) |
Present value of operating lease liabilities |
|
183,341 |
|
325,336 |
Less: current portion |
|
(153,602) |
|
(184,436) |
Long-term operating lease liabilities |
$ |
29,739 |
$ |
140,900 |
|