| 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:
Schedule of Lease-related Assets and Liabilities
| |
|
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:
Schedule of Information Related to Lease Expense for Finance and Operating Leases
| |
|
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:
Schedule of Supplemental Cash Flow Information
| |
|
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:
Schedule of Future Minimum Rentals Under Right-to-use Operating and Finance Leases
| 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. |
|