Quarterly report pursuant to Section 13 or 15(d)

Lessee Leases

v3.22.2.2
Lessee Leases
 9 Months Ended
Sep. 30, 2022
Leases [Abstract]  
Lessee Leases

Note 6 – Lessee Leases

 

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 on or after 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 $1,176,653 and $882,081 as of September 30, 2022 and December 31, 2021, respectively. Accumulated amortization associated with finance leases was $389,795 and $236,470 as of September 30, 2022 and December 31, 2021, respectively.

 

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

 

    2022     2021     2022     2021  
    Three Months Ended
September 30,		     Nine Months Ended
September 30,		  
    2022     2021     2022     2021  
Operating lease cost included in cost of goods   $ 976     $ 27,868     $ 14,030     $ 90,569  
Operating lease cost included in operating costs     7,500       13,496       22,200       35,788  
Total operating lease cost (1)     8,476       41,364       36,230       126,357  
Finance lease cost, included in cost of goods:                                
Amortization of lease assets     54,855       41,111       153,324       90,082  
Interest on lease liabilities     7,258       6,765       21,745       18,595  
Total finance lease cost     62,113       47,876       175,069       108,677  
Short-term lease cost     -       -       -       2,300  
Total lease cost   $ 70,589     $ 89,240     $ 211,299     $ 237,334  

 

  (1) Right of use asset amortization under operating agreements was $7,214 and $39,006 for the three months ended September 30, 2022 and 2021, respectively. Right of use asset amortization under operating agreements was $32,847 and $106,545 for the nine months ended September 30, 2022 and 2021, respectively.

 

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

 

    September 30,
2022		     December 31,
2021		  
Weighted-average remaining lease term – operating leases     0.41 years       0.95 years  
Weighted-average remaining lease term – finance leases     3.80 years       3.83 years  
Weighted-average discount rate – operating leases     4.0 %     5.7 %
Weighted-average discount rate – finance leases     5.5 %     3.8 %

 

 

Note 6 – Lessee Leases (continued)

 

Finance lease liabilities were as follows:

 

    September 30,
2022		     December 31,
2021		  
Gross finance lease liabilities   $ 759,561     $ 634,192  
Less: imputed interest     (56,503 )     (51,212 )
Present value of finance lease liabilities     703,058       582,980  
Less: current portion     (200,310 )     (167,515 )
Long-term finance lease liabilities   $ 502,748     $ 415,465  

 

Operating lease liabilities were as follows:

 

    September 30,
2022		     December 31,
2021		  
Gross operating lease liabilities   $ 12,500     $ 55,865  
Less: imputed interest     (124 )     (8,832 )
Present value of operating lease liabilities     12,376       47,033  
Less: current portion     (12,376 )     (42,058 )
Long-term operating lease liabilities   $ -     $ 4,975  

 

Lease maturities were as follows:

 

Maturity of lease liabilities

 

12 months ending September 30,     Finance leases       Operating leases  
2022   $ 200,310     $ 12,376  
2023     187,397       -  
2024     168,143       -  
2025     102,522       -  
2026     44,686       -  
Total     703,058       12,376  
Less: Current maturities     (200,310 )     (12,376 )
Long-term liability   $ 502,748     $ -