Lessee Leases

6 Months Ended

Jun. 30, 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 $1,550,550 and $1,289,714 as of June 30, 2023, and December 31, 2022, respectively. Accumulated amortization associated with finance leases was $559,479 and $394,391 as of June 30, 2023, and December 31, 2022, respectively.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating lease cost included in cost of goods	$	-	$	7,964	$	-	$	13,054
Operating lease cost included in operating costs		19,679		7,200		41,858		14,700
Total operating lease cost (1)		19,679		15,164		41,858		27,754
Finance lease cost, included in cost of goods:
Amortization of lease assets		88,319		47,416		165,088		98,469
Interest on lease liabilities		18,573		6,929		33,056		14,487
Total finance lease cost		106,892		54,345		198,144		112,956
Short-term lease cost		-		-		-		-
Total lease cost	$	126,571	$	69,509	$	240,002	$	140,710

(1) Right of use asset amortization under operating agreements was $15,199 and $12,488 for the three months ended June 30, 2023 and 2022, respectively. Right of use asset amortization under operating agreements was $30,399 and $25,634 for the six months ended June 30, 2023 and 2022, respectively.

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

	June 30, 2023			December 31, 2022
Weighted-average remaining lease term – operating leases		3.60 years			4.75 years
Weighted-average remaining lease term – finance leases		3.51 years			4.63 years
Weighted-average discount rate – operating leases		6.0	%		6.0	%
Weighted-average discount rate – finance leases		6.89	%		5.5	%

Note 6 – Lessee Leases (continued)

Finance lease liabilities were as follows: 

	June 30, 2023			December 31, 2022
Gross finance lease liabilities	$	1,210,895		$	897,849
Less: imputed interest		(134,360	)		(89,939	)
Present value of finance lease liabilities		1,076,535			807,910
Less: current portion		(309,852	)		(232,058	)
Long-term finance lease liabilities	$	766,683		$	575,852

Operating lease liabilities were as follows:

	June 30, 2023			December 31, 2022
Gross operating lease liabilities	$	387,823		$	428,946
Less: imputed interest		(48,058	)		(58,782	)
Present value of operating lease liabilities		339,765			370,164
Less: current portion		(66,132	)		(62,861	)
Long-term operating lease liabilities	$	273,633		$	307,303

Lease maturities were as follows:

Maturity of lease liabilities 

12 months ending June 30,	Finance leases			Operating leases
2024	$	309,852		$	66,132
2025		310,751			73,285
2026		271,245			80,528
2027		167,616			88,575
2028		17,071			31,245
Total		1,076,535			339,765
Less: Current maturities		(309,852	)		(66,132	)
Long-term liability	$	766,683		$	273,633