Quarterly report pursuant to Section 13 or 15(d)

Lessee Leases

v3.23.2
Lessee Leases
 6 Months Ended
Jun. 30, 2023
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 $1,550,550 and $1,289,714 as of June 30, 2023, and December 31, 2022, respectively. Accumulated amortization associated with finance leases was $559,479 and $394,391 as of June 30, 2023, and December 31, 2022, respectively.

 

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

 

    2023     2022     2023     2022  
    Three Months Ended June 30,     Six Months Ended June 30,  
    2023     2022     2023     2022  
Operating lease cost included in cost of goods   $ -     $ 7,964     $ -     $ 13,054  
Operating lease cost included in operating costs     19,679       7,200       41,858       14,700  
Total operating lease cost (1)     19,679       15,164       41,858       27,754  
Finance lease cost, included in cost of goods:                                
Amortization of lease assets     88,319       47,416       165,088       98,469  
Interest on lease liabilities     18,573       6,929       33,056       14,487  
Total finance lease cost     106,892       54,345       198,144       112,956  
Short-term lease cost     -       -       -       -  
Total lease cost   $ 126,571     $ 69,509     $ 240,002     $ 140,710  

 

  (1) Right of use asset amortization under operating agreements was $15,199 and $12,488 for the three months ended June 30, 2023 and 2022, respectively. Right of use asset amortization under operating agreements was $30,399 and $25,634 for the six months ended June 30, 2023 and 2022, respectively.

 

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

 

    June 30,
2023		     December 31,
2022		  
Weighted-average remaining lease term – operating leases     3.60 years       4.75 years  
Weighted-average remaining lease term – finance leases     3.51 years       4.63 years  
Weighted-average discount rate – operating leases     6.0 %     6.0 %
Weighted-average discount rate – finance leases     6.89 %     5.5 %

 

 

Note 6 – Lessee Leases (continued)

 

Finance lease liabilities were as follows: 

 

    June 30,
2023		     December 31,
2022		  
Gross finance lease liabilities   $ 1,210,895     $ 897,849  
Less: imputed interest     (134,360 )     (89,939 )
Present value of finance lease liabilities     1,076,535       807,910  
Less: current portion     (309,852 )     (232,058 )
Long-term finance lease liabilities   $ 766,683     $ 575,852  

 

Operating lease liabilities were as follows:

 

    June 30,
2023		     December 31,
2022		  
Gross operating lease liabilities   $ 387,823     $ 428,946  
Less: imputed interest     (48,058 )     (58,782 )
Present value of operating lease liabilities     339,765       370,164  
Less: current portion     (66,132 )     (62,861 )
Long-term operating lease liabilities   $ 273,633     $ 307,303  

 

Lease maturities were as follows:

 

Maturity of lease liabilities 

 

12 months ending June 30,     Finance leases     Operating leases  
2024     $ 309,852     $ 66,132  
2025       310,751       73,285  
2026       271,245       80,528  
2027       167,616       88,575  
2028       17,071       31,245  
Total       1,076,535       339,765  
Less: Current maturities       (309,852 )     (66,132 )
Long-term liability     $ 766,683     $ 273,633