Quarterly report pursuant to Section 13 or 15(d)

Note 6 - Lessee Leases

v3.19.2
Note 6 - Lessee Leases
6 Months Ended
Jun. 30, 2019
Notes  
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, 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 $163,584 and $0 as of June 30, 2019 and December 31, 2018, respectively. Finance lease right-of-use assets of $148,732 were reported as part of property and equipment at March 31, 2019 and have been reclassified and presented as finance lease right-of-use assets at June 30, 2019. Accumulated amortization associated with finance leases was $12,443 and $0 as of June 30, 2019 and December 31, 2018, respectively.

 

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

 

 

 

Three Months

Ended June 30,

2019

 

Six Months

Ended June 30,

2019

Operating lease cost included in cost of goods

$

34,238

$

91,095

Operating lease cost included in operating costs

 

14,592

 

28,288

Total operating lease cost (1)

 

48,830

 

119,383

Finance lease cost, included in cost of goods:

 

 

 

 

Amortization of lease assets

 

7,076

 

12,443

Interest on lease liabilities

 

1,890

 

2,150

Total finance lease cost

 

8,966

 

14,593

Short-term lease cost

 

8,370

 

16,740

Total lease cost

$

66,166

$

150,716

 

(1)      Right of use asset amortization under operating agreements was $45,094 for the three months ended June 30, 2019 and $93,767 for the six months ended June 30, 2019.

 

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

 

 

June 30,

2019

Weighted-average remaining lease term – operating leases

2.3 years

Weighted-average remaining lease term – finance leases

3.7 years

Weighted-average discount rate – operating leases

10.2%

Weighted-average discount rate – finance leases

9.0%

 

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

 

 

 

Finance

Leases

 

Operating

Leases

 

Total

Gross lease liabilities

$

189,857

$

493,377

$

683,234

Less: imputed interest

 

(55,484)

 

(59,950)

 

(115,434)

Present value of lease liabilities

 

134,373

 

433,427

 

567,800

Less: current portion

 

(31,597)

 

(195,999)

 

(227,596)

Long-term lease liabilities

$

102,776

$

237,428

$

340,204