Finance and Operating Lease Obligations

12 Months Ended

Dec. 31, 2021

Finance And Operating Lease Obligations

Finance and Operating Lease Obligations

Note 10 – Finance and Operating Lease Obligations

We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related right-of-use assets and right-of-use obligations at the present value of lease payments over the term. We do not separate lease and non-lease components of contracts.

Generally, we use our most recent agreed upon borrowing interest rate at lease commencement as our interest rate, as most of our operating leases do not provide a readily determinable implicit interest rate.

The following table presents our lease-related assets and liabilities at December 31, 2021 and 2020:

	Balance Sheet Classification	December 31, 2021			December 31, 2020
Assets:
Operating leases	Right-of-use operating lease assets	$	821,274		$	1,000,272
Finance leases	Property and equipment, net		220,461			249,985
Total lease assets		$	1,041,735		$	1,250,257
Liabilities:
Current:
Operating leases	Right-of-use operating lease obligations	$	247,017		$	172,952
Finance leases	Current liabilities		220,461			249,985
Noncurrent:
Operating leases	Right-of-use operating lease obligations		574,257			827,320
Total lease liabilities		$	1,041,735		$	1,250,257
Weighted-average remaining term:
Operating leases			3.57 years			4.17 years
Finance leases (1)			0 years			0 years
Weighted-average discount rate:
Operating leases			13.0	%		13.0	%
Finance leases			4.9	%		4.9	%

The following table presents certain information related to lease expense for finance and operating leases for the years ended December 31, 2021 and 2020:

	Year Ended December 31, 2021		Year Ended December 31, 2020
Finance lease expense:
Depreciation/amortization of leased assets	$	-	$	26,349
Interest on lease liabilities		-		9,455
Operating leases:
Short-term lease expense (2)		198,187		169,465
Total lease expense	$	198,187	$	205,269

Other Information

The following table presents supplemental cash flow information for the years ended December 31, 2021 and 2020:

	Year Ended December 31, 2021		Year Ended December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	277,278	$	137,847
Operating cash flows for finance leases	$	-	$	9,455
Financing cash flows for finance lease payments	$	29,524	$	200,709

Aggregate future minimum lease payments under right-of-use operating and finance leases are as follows:

Twelve months ending December 31,	Right-of-Use Operating Leases			Finance Lease
2022	$	339,538		$	224,252
2023		275,176			-
2024		219,463			-
2025		186,496			-
Thereafter		-			-
Total		1,020,673			224,252
Less interest		(199,399	)		(3,791	)
Present value of minimum lease payments	$	821,274		$	220,461
Less current portion of lease obligations		(247,017	)		(220,461	)
Lease obligations, net of current portion	$	574,257		$	-

(1)	As of December 31, 2021, the Company was in default under its finance lease obligation, therefore, the aggregate future minimum lease payments and accrued interest under this finance lease in the amount of $0.2 million are deemed to be immediately due.
(2)	Expenses are included in general and administrative expenses in the consolidated statements of operations.