Lessee Leases

9 Months Ended

Sep. 30, 2022

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 $1,176,653 and $882,081 as of September 30, 2022 and December 31, 2021, respectively. Accumulated amortization associated with finance leases was $389,795 and $236,470 as of September 30, 2022 and December 31, 2021, respectively.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operating lease cost included in cost of goods	$	976	$	27,868	$	14,030	$	90,569
Operating lease cost included in operating costs		7,500		13,496		22,200		35,788
Total operating lease cost (1)		8,476		41,364		36,230		126,357
Finance lease cost, included in cost of goods:
Amortization of lease assets		54,855		41,111		153,324		90,082
Interest on lease liabilities		7,258		6,765		21,745		18,595
Total finance lease cost		62,113		47,876		175,069		108,677
Short-term lease cost		-		-		-		2,300
Total lease cost	$	70,589	$	89,240	$	211,299	$	237,334

(1) Right of use asset amortization under operating agreements was $7,214 and $39,006 for the three months ended September 30, 2022 and 2021, respectively. Right of use asset amortization under operating agreements was $32,847 and $106,545 for the nine months ended September 30, 2022 and 2021, respectively.

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

	September 30, 2022			December 31, 2021
Weighted-average remaining lease term – operating leases		0.41 years			0.95 years
Weighted-average remaining lease term – finance leases		3.80 years			3.83 years
Weighted-average discount rate – operating leases		4.0	%		5.7	%
Weighted-average discount rate – finance leases		5.5	%		3.8	%

Note 6 – Lessee Leases (continued)

Finance lease liabilities were as follows:

	September 30, 2022			December 31, 2021
Gross finance lease liabilities	$	759,561		$	634,192
Less: imputed interest		(56,503	)		(51,212	)
Present value of finance lease liabilities		703,058			582,980
Less: current portion		(200,310	)		(167,515	)
Long-term finance lease liabilities	$	502,748		$	415,465

Operating lease liabilities were as follows:

	September 30, 2022			December 31, 2021
Gross operating lease liabilities	$	12,500		$	55,865
Less: imputed interest		(124	)		(8,832	)
Present value of operating lease liabilities		12,376			47,033
Less: current portion		(12,376	)		(42,058	)
Long-term operating lease liabilities	$	-		$	4,975

Lease maturities were as follows:

Maturity of lease liabilities

12 months ending September 30,		Finance leases			Operating leases
2022	$	200,310		$	12,376
2023		187,397			-
2024		168,143			-
2025		102,522			-
2026		44,686			-
Total		703,058			12,376
Less: Current maturities		(200,310	)		(12,376	)
Long-term liability	$	502,748		$	-