| LEASES |
NOTE 6. LEASES
Lessee
We have operating leases for our corporate office, two satellite facilities in the state of Washington and for certain equipment. We account for lease components (such as rent payments) separately from the non-lease components (such as common-area maintenance costs, real estate and sales taxes and insurance costs). The discount rate represents the interest rate implicit in each lease or our incremental borrowing rate at lease commencement date.
On September 21, 2021, we executed a third amendment to one of our satellite facilities to amend the lease expiration date from December 31, 2021 to December 31, 2023, with monthly base rents of $1,025 from January 1, 2022 to December 31, 2023. As a result of the amendment, we recorded a $23,293 increase to operating lease right-of-use assets and operating lease liabilities.
As of June 30, 2022, our leases have remaining lease terms ranging from 18 months to 57 months.
Supplemental balance sheet information related to leases is as follows:
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As of June 30, 2022 |
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Amount |
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Classification |
Operating leases: |
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Operating lease right-of-use lease assets |
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$ |
1,118,888 |
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Operating lease current liabilities |
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$ |
237,915 |
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Current portion of operating lease liabilities |
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Operating lease long-term liabilities |
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957,095 |
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Long-term operating lease liabilities |
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Total operating lease liabilities |
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$ |
1,195,010 |
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Weighted-average remaining lease term: |
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Operating leases |
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4.43 |
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Weighted-average discount rate: |
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Operating leases |
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4.4 |
% |
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The components of lease expense are as follows:
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Three Months Ended June 30, 2022 |
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Amount |
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Classification |
Operating lease cost |
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$ |
71,249 |
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Selling, general and administrative expense |
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Six Months Ended June 30, 2022 |
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Amount |
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Classification |
Operating lease cost |
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$ |
142,154 |
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Selling, general and administrative expense |
Supplemental cash flow information related to leases is as follows:
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Six Months Ended June 30, 2022 |
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Amount |
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Classification |
Cash paid for amounts included in the
measurement of lease liabilities: |
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Operating cash flows from operating leases |
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$ |
139,596 |
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Net income |
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Right-of-use assets obtained in exchange
for lease liabilities: |
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Operating leases |
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$ |
71,901 |
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Supplemental cash flow information |
As of June 30, 2022, future maturities of our operating lease liabilities are as follows:
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Amount |
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For the remaining six months ending December 31, 2022 |
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$ |
141,707 |
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Years ending December 31, |
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2023 |
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290,877 |
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2024 |
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288,892 |
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2025 |
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294,507 |
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2026 |
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302,011 |
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2027 |
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|
2,985 |
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Thereafter |
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— |
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Total minimum lease payments |
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1,320,979 |
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Less: imputed interest |
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(125,969 |
) |
Total operating lease liability |
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1,195,010 |
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Less: current portion |
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(237,915 |
) |
Long-term portion |
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$ |
957,095 |
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