Annual report pursuant to Section 13 and 15(d)

Capital Lease Obligations

Capital Lease Obligations
12 Months Ended
Dec. 31, 2017
Debt Disclosure [Abstract]  
Capital Lease Obligations

Note 11 – Capital Lease Obligations


The Company leases various assets under capital leases expiring in 2019 and 2020 as follows:


    December 31, 2017     December 31, 2016  
Medical equipment   $ 4,686,736     $ 4,497,025  
Less accumulated depreciation     (3,842,443 )     (2,809,511 )
Net   $ 844,293     $ 1,687,514  


Depreciation expense on assets under capital leases was $1.0 million and $1.3 million for the years ended December 31, 2017 and 2016, respectively.


During the fourth quarter of 2016, the Company did not meet its payment obligations under two of its capital lease agreements, which comprise substantially all of the Company’s aggregate capital lease obligations. In December 2016, the two counterparties to these lease agreements filed separate lawsuits against the Company and in January of 2017 default judgments were issued against the Company in the aggregate amount of $3.5 million, which includes default interest, late fees, penalties and other fees (see Note 15). As a result, the Company recognized additional interest expense of $0.6 million to recognize the additional obligations under these leases. As of December 31, 2017, the Company did not meet its obligations under these two capital leases, therefore, the aggregate future minimum rentals under capital leases are deemed to be current.