XML 26 R15.htm IDEA: XBRL DOCUMENT

LEASES

3 Months Ended

Mar. 31, 2024

NOTE 9 – LEASES

The Company leases office space domestically under operating leases including: (1) the Company’s headquarters in New York, New York for which the lease expires in 2025, (2) a marketing and sales center in Huntington Beach, California for which the lease expires in 2024, (3) a patient care center in Greenville, South Carolina for which the lease expires in 2024, (4) warehouse and fulfillment centers in Columbia, Pennsylvania and Lancaster, Pennsylvania for which the leases expire in 2024 and (5) a warehouse and pharmacy operations center in Lancaster, Pennsylvania for which the lease expires in 2029, with an additional five year option to extend, for which the Company expects to utilize. WorkSimpli leases two office spaces in Puerto Rico for which the leases expire in 2024.

The following is a summary of the Company’s operating right-of-use assets and operating lease liabilities as of March 31, 2024:


Operating right-of-use assets	$	1,674,014
Operating lease liabilities - current	$	447,559
Operating lease liabilities - noncurrent	$	1,311,452

Total accumulated amortization of the Company’s operating right-of-use assets was $2.3 million and $1.5 million as of the three months ended March 31, 2024 and 2023, respectively.

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 unaudited condensed consolidated balance sheet as of March 31, 2024:


Fiscal year 2024	$	519,253
Fiscal year 2025		273,749
Fiscal year 2026		211,046
Fiscal year 2027		217,378
Fiscal year 2028		223,899
Thereafter		1,333,857
Less: imputed interest		(1,020,171	)
Present value of operating lease liabilities	$	1,759,011

Operating lease expenses were approximately $226 thousand and $223 thousand for the three months ended March 31, 2024 and 2023, respectively, and were included in other operating expenses in our unaudited condensed consolidated statement of operations.

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

	March 31,
	2024		2023
Cash paid for operating lease liabilities	$	227,028	$	226,797

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

	March 31, 2024			December 31, 2023
Weighted average remaining lease term in years		8.72			2.18
Weighted average discount rate		11.11	%		7.17	%

We have elected to apply the short-term lease exception to the warehouse and fulfillment center spaces we lease in Columbia, Pennsylvania and Lancaster, Pennsylvania. These leases have a term of less than 12 months and are not recognized on the balance sheet, but rather expensed on a straight-line basis over the lease term. Straight-line lease payments are approximately $2 thousand and $3 thousand per month, for Columbia, Pennsylvania and Lancaster, Pennsylvania, respectively. Additionally, Conversion Labs PR utilizes office space in Puerto Rico on a month-to-month basis incurring rental expense of approximately $3 thousand per month.