Lessee Leases

3 Months Ended

Mar. 31, 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 $1,606,417 and $1,289,714 as of March 31, 2023, and December 31, 2022, respectively. Accumulated amortization associated with finance leases was $471,149 and $394,391 as of March 31, 2023, and December 31, 2022, respectively.

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

	Three Months Ended March 31,
	2023		2022
Operating lease cost included in cost of goods	$	-	$	7,964
Operating lease cost included in operating costs		22,179		7,200
Total operating lease cost (1)		22,179		15,164
Finance lease cost, included in cost of goods:
Amortization of lease assets		76,768		47,416
Interest on lease liabilities		14,483		6,929
Total finance lease cost		91,251		54,345
Short-term lease cost		-		-
Total lease cost	$	113,430	$	69,509

(1) Right of use asset amortization under operating agreements was $15,199 and $12,488 for the three months ended March 31, 2023 and 2022, respectively.

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

	March 31, 2023			December 31, 2022
Weighted-average remaining lease term – operating leases		4.75 years			4.75 years
Weighted-average remaining lease term – finance leases		3.73 years			4.63 years
Weighted-average discount rate – operating leases		6.0	%		6.0	%
Weighted-average discount rate – finance leases		6.9	%		5.5	%

Note 6 – Lessee Leases (continued)

Finance lease liabilities were as follows:

	March 31, 2023			December 31, 2022
Gross finance lease liabilities	$	1,268,848		$	897,849
Less: imputed interest		(148,115	)		(89,939	)
Present value of finance lease liabilities		1,120,733			807,910
Less: current portion		(225,738	)		(232,058	)
Long-term finance lease liabilities	$	894,995		$	575,852

Operating lease liabilities were as follows:

	March 31, 2023			December 31, 2022
Gross operating lease liabilities	$	437,219		$	428,946
Less: imputed interest		(82,255	)		(58,782	)
Present value of operating lease liabilities		354,964			370,164
Less: current portion		(64,484	)		(62,861	)
Long-term operating lease liabilities	$	290,480		$	307,303

Lease maturities were as follows:

Maturity of lease liabilities

12 months ending March 31,	Finance leases			Operating leases
2022	$	225,738		$	64,484
2023		306,365			71,279
2024		290,463			78,611
2025		226,040			86,511
2026		72,127			54,077
Total		1,120,733			354,964
Less: Current maturities		(225,738	)		(64,484	)
Long-term liability	$	894,995		$	290,480