Quarterly report pursuant to Section 13 or 15(d)

Lessee Leases

v3.23.3
Lessee Leases
 9 Months Ended
Sep. 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 $2,272,984 and $1,289,714 as of September 30, 2023, and December 31, 2022, respectively. Accumulated amortization associated with finance leases was $712,227 and $442,756 as of September 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 September 30,     Nine Months Ended September 30,  
    2023     2022     2023     2022  
Operating lease cost included in cost of goods   $ -     $ 976     $ -     $ 16,904  
Operating lease cost included in operating costs     18,398       7,500       60,256       22,200  
Total operating lease cost (1)     18,398       8,476       60,256       39,104  
Finance lease cost, included in cost of goods:                                
Amortization of lease assets     104,383       54,855       269,470       149,687  
Interest on lease liabilities     23,394       7,258       56,450       21,116  
Total finance lease cost     127,777       62,113       325,920       170,803  
Short-term lease cost     -       -       -       -  
Total lease cost   $ 146,175     $ 70,589     $ 386,176     $ 209,907  

 

  (1) Right of use asset amortization under operating agreements was $15,661 and $7,214 for the three months ended September 30, 2023 and 2022, respectively. Right of use asset amortization under operating agreements was $46,289 and $32,847 for the nine months ended September 30, 2023 and 2022, respectively.

 

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

  

    September 30,
2023		     December 31,
2022		  
Weighted-average remaining lease term – operating leases     4.01 years       4.75 years  
Weighted-average remaining lease term – finance leases     3.49 years       4.63 years  
Weighted-average discount rate – operating leases     6.0 %     6.0 %
Weighted-average discount rate – finance leases     7.5 %     5.5 %

 

 

Note 6 – Lessee Leases (continued)

 

Finance lease liabilities were as follows:

 

Schedule of finance lease liabilities

 

    September 30,
2023		     December 31,
2022		  
Gross finance lease liabilities   $ 1,696,301     $ 897,849  
Less: imputed interest     (207,418 )     (89,939 )
Present value of finance lease liabilities     1,488,883       807,910  
Less: current portion     (419,073 )     (232,058 )
Long-term finance lease liabilities   $ 1,069,810     $ 575,852  

 

Operating lease liabilities were as follows:

 

    September 30,
2023		     December 31,
2022		  
Gross operating lease liabilities   $ 366,918     $ 428,946  
Less: imputed interest     (43,043 )     (58,782 )
Present value of operating lease liabilities     323,875       370,164  
Less: current portion     (67,804 )     (62,861 )
Long-term operating lease liabilities   $ 256,071     $ 307,303  

 

Lease maturities were as follows:

 

Maturity of lease liabilities

 

12 months ending September 30,   Finance leases     Operating leases  
2024   $ 419,073     $ 67,804  
2025     424,735       74,860  
2026     388,723       82,475  
2027     251,571       90,670  
2028     4,781       8,066  
Total     1,488,883       323,875  
Less: Current maturities     (419,073 )     (67,804 )
Long-term liability   $ 1,069,810     $ 256,071