XML 24 R14.htm IDEA: XBRL DOCUMENT

LEASES

3 Months Ended

Mar. 31, 2022

NOTE 8 – LEASES

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes all existing guidance on accounting for leases in ASC 840, Lease Accounting. ASU 2016-02 is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. ASU 2016-02 will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income.

The Company leases office space domestically under operating leases. The Company’s headquarters are located in New York, New York for which the lease expires in 2025. We operate a marketing and sales center in Huntington Beach, California for which the lease expires in 2023, a patient care center in Greenville, South Carolina for which the lease expires in 2024 and a warehouse and fulfillment center in Columbia, Pennsylvania for which the lease expires in 2023.

The table below reconciles the undiscounted future minimum lease payments under the above noted operating leases to the total operating lease liabilities recognized on the consolidated balance sheet as of March 31, 2022:


Remainder of fiscal year 2022	$	614,098
Fiscal year 2023		732,409
Fiscal year 2024		484,580
Fiscal year 2025		68,850
Less: imputed interest		(159,404	)
Present value of operating lease liabilities	$	1,740,533

Operating lease expenses were $202,412 and $93,410 for the three months ended March 31, 2022 and 2021, respectively, and were included in other operating expenses in our consolidated statement of operations.

Supplemental cash flow information related to operating lease liabilities consisted of the following:

	March 31,
	2022		2021
Cash paid for operating lease liabilities	$	129,290	$	89,935

Supplemental balance sheet information related to operating lease liabilities consisted of the following:

	March 31, 2022			December 31, 2021
Weighted average remaining lease term in years		3.51			3.75
Weighted average discount rate		7.15	%		7.15	%

We have elected to apply the short-term lease exception to the warehouse space we lease in Lancaster, Pennsylvania. This lease has a term of 12 months and is not recognized on the balance sheet, but rather expensed on a straight-line basis over the lease term. Straight-line lease payments are $2,100 per month. Additionally, Conversion Labs PR utilizes office space in Puerto Rico, which is subleased from Fried LLC, on a month-to-month basis, incurring rental expense of approximately $3,000 per month.