Lessee Leases

9 Months Ended

Sep. 30, 2021

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 $777,451 and $406,242 as of September 30, 2021 and December 31, 2020, respectively. Accumulated amortization associated with finance leases was $202,861 and $110,164 as of September 30, 2021 and December 31, 2020, respectively.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Operating lease cost included in cost of goods	$	27,868	$	35,581	$	90,569	$	120,153
Operating lease cost included in operating costs		13,496		13,846		35,788		41,965
Total operating lease cost (1)		41,364		49,427		126,357		162,118
Finance lease cost, included in cost of goods:
Amortization of lease assets		41,111		19,349		90,082		50,776
Interest on lease liabilities		6,765		4,719		18,595		12,689
Total finance lease cost		47,876		24,068		108,677		63,465
Short-term lease cost		0		5,980		2,300		23,920
Total lease cost	$	89,240	$	79,475	$	237,334	$	249,503

(1) Right of use asset amortization under operating agreements was $39,006 and $45,707 for the three months ended September 30, 2021 and 2020, respectively. Right of use asset amortization under operating agreements was $106,545 and $141,429 for the nine months ended September 30, 2021 and 2020, respectively.

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

	September 30, 2021			December 31, 2020
Weighted-average remaining lease term – operating leases		0.7			0.93 years
Weighted-average remaining lease term – finance leases		3.83			3.41 years
Weighted-average discount rate – operating leases		2.9	%		10.1	%
Weighted-average discount rate – finance leases		4.6	%		8.3	%

Finance lease liabilities were as follows:

	September 30, 2021			December 31, 2020
Gross finance lease liabilities	$	566,867		$	310,685
Less: imputed interest		(45,448	)		(40,183	)
Present value of finance lease liabilities		521,419			270,502
Less: current portion		(147,527	)		(79,526	)
Long-term finance lease liabilities	$	373,892		$	190,976

Operating lease liabilities were as follows:

	September 30, 2021			December 31, 2020
Gross operating lease liabilities	$	67,147		$	146,171
Less: imputed interest		(2,183	)		(6,863	)
Present value of operating lease liabilities		64,964			139,308
Less: current portion		(52,587	)		(123,158	)
Long-term operating lease liabilities	$	12,377		$	16,150

Note 6 – Lessee Leases (continued)

Lease maturities were as follows:

Maturity of lease liabilities
12 months ending September 30,	Finance leases		Operating leases
2022	$	147,527	$	52,587
2023		136,233		12,377
2024		114,082		-
2025		89,908		-
2026		33,669		-
Total		521,419		64,964
Less: Current maturities		147,527		52,587
Long-term liability	$	373,892	$	12,377