RIGHT OF USE ASSET

12 Months Ended

Dec. 31, 2022

Right Of Use Asset

RIGHT OF USE ASSET

NOTE 12. RIGHT OF USE ASSET

The majority of our lease obligations are finance leases for the buildings from which we conduct our business. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the Consolidated Balance Sheets as either operating or finance leases at the inception of an agreement where it is determined that a lease exists.

Finance lease assets represent the right to use an underlying asset for the lease term, and finance lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We use a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. We update the incremental borrowing rate in the event of a lease modification such as a renewal or option that adds time and payments to a lease. Our lease terms generally do not include options to extend or terminate the lease unless there is a reasonable certainty that the options will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the expense related to finance leases using the effective interest rate method from the commencement date to the end of the lease term.

Leases with an initial term of 12 months or less are not recorded on our Condensed Consolidated Balance Sheets. We recognize lease expense for these leases using the straight-line method over the lease term.

The weighted average remaining lease term is 19.0 years and the weighted average discount rate is 16.9%.

The Company’s right of use assets as of December 31, 2022 were as follows:

	December 31, 2022
	Gross Carrying Amount		Accumulated Depreciation			Net Book Value
Right of Use Buildings	$	5,397,497	$	(269,875	)	$	5,127,622

Supplementary information on the Company’s lease liabilities as of December 31, 2022 included the following :

	December 31, 2022
Interest	$	926,897
Amortization and depreciation		269,875
Finance lease related expenses	$	1,196,772
Finance lease related payments	$	730,917

Future lease payments under our non-cancellable finance leases as of December 31, 2022 were as follows:

2023	$	767,463
2024		806,038
2025		846,339
2026		888,547
2027		930,860
Thereafter		19,152,400
Total Undiscounted Cashflows		23,391,541
Imputed Interest		(18,724,961	)
Lease Liability	$	4,666,580