Lessee Leases

9 Months Ended

Sep. 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 $2,272,984 and $1,289,714 as of September 30, 2023, and December 31, 2022, respectively. Accumulated amortization associated with finance leases was $712,227 and $442,756 as of September 30, 2023, and December 31, 2022, respectively.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease cost included in cost of goods	$	-	$	976	$	-	$	16,904
Operating lease cost included in operating costs		18,398		7,500		60,256		22,200
Total operating lease cost (1)		18,398		8,476		60,256		39,104
Finance lease cost, included in cost of goods:
Amortization of lease assets		104,383		54,855		269,470		149,687
Interest on lease liabilities		23,394		7,258		56,450		21,116
Total finance lease cost		127,777		62,113		325,920		170,803
Short-term lease cost		-		-		-		-
Total lease cost	$	146,175	$	70,589	$	386,176	$	209,907

(1) Right of use asset amortization under operating agreements was $15,661 and $7,214 for the three months ended September 30, 2023 and 2022, respectively. Right of use asset amortization under operating agreements was $46,289 and $32,847 for the nine months ended September 30, 2023 and 2022, respectively.

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

	September 30, 2023			December 31, 2022
Weighted-average remaining lease term – operating leases		4.01 years			4.75 years
Weighted-average remaining lease term – finance leases		3.49 years			4.63 years
Weighted-average discount rate – operating leases		6.0	%		6.0	%
Weighted-average discount rate – finance leases		7.5	%		5.5	%

Note 6 – Lessee Leases (continued)

Finance lease liabilities were as follows:

	September 30, 2023			December 31, 2022
Gross finance lease liabilities	$	1,696,301		$	897,849
Less: imputed interest		(207,418	)		(89,939	)
Present value of finance lease liabilities		1,488,883			807,910
Less: current portion		(419,073	)		(232,058	)
Long-term finance lease liabilities	$	1,069,810		$	575,852

Operating lease liabilities were as follows:

	September 30, 2023			December 31, 2022
Gross operating lease liabilities	$	366,918		$	428,946
Less: imputed interest		(43,043	)		(58,782	)
Present value of operating lease liabilities		323,875			370,164
Less: current portion		(67,804	)		(62,861	)
Long-term operating lease liabilities	$	256,071		$	307,303

Lease maturities were as follows:

Maturity of lease liabilities

12 months ending September 30,	Finance leases			Operating leases
2024	$	419,073		$	67,804
2025		424,735			74,860
2026		388,723			82,475
2027		251,571			90,670
2028		4,781			8,066
Total		1,488,883			323,875
Less: Current maturities		(419,073	)		(67,804	)
Long-term liability	$	1,069,810		$	256,071