Lessee Leases

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Lessee Leases

Note 5 – 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 $933,121 and $882,081 as of March 31, 2022 and December 31, 2021, respectively. Accumulated amortization associated with finance leases was $283,887 and $236,470 as of March 31, 2022 and December 31, 2021, respectively.

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

	Three Months Ended March 31,
	2022		2021
Operating lease cost included in cost of goods	$	7,964	$	32,864
Operating lease cost included in operating costs		7,200		11,096
Total operating lease cost (1)		15,164		43,960
Finance lease cost, included in cost of goods:
Amortization of lease assets		47,416		28,518
Interest on lease liabilities		6,929		5,467
Total finance lease cost		54,345		33,985
Short-term lease cost		-		2,300
Total lease cost	$	69,509	$	80,245

(1) Right of use asset amortization under operating agreements was $12,488 and $40,981 for the three months ended March 31, 2022 and 2021, respectively.

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

	March 31, 2022			December 31, 2021
Weighted-average remaining lease term – operating leases		0.55 years			0.95 years
Weighted-average remaining lease term – finance leases		3.72 years			3.83 years
Weighted-average discount rate – operating leases		3.4	%		5.7	%
Weighted-average discount rate – finance leases		4.8	%		3.8	%

Finance lease liabilities were as follows:

	March 31, 2022			December 31, 2021
Gross finance lease liabilities	$	638,757		$	634,192
Less: imputed interest		(51,356	)		(51,212	)
Present value of finance lease liabilities		587,401			582,980
Less: current portion		(175,797	)		(167,515	)
Long-term finance lease liabilities	$	411,604		$	415,465

Operating lease liabilities were as follows:

	March 31, 2022			December 31, 2021
Gross operating lease liabilities	$	33,565		$	55,865
Less: imputed interest		(646	)		(8,832	)
Present value of operating lease liabilities		32,919			47,033
Less: current portion		(32,919	)		(42,058	)
Long-term operating lease liabilities	$	-		$	4,975

Note 5 – Lessee Leases (continued)

Lease maturities were as follows:

Maturity of lease liabilities

12 months ending March 31,	Finance leases			Operating leases
2022	$	175,797		$	32,919
2023		150,502			-
2024		140,912			-
2025		100,785			-
2026		19,405			-
Total		587,401			32,919
Less: Current maturities		(175,797	)		(32,919	)
Long-term liability	$	411,604		$	-