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Leases | 6 Months Ended
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Jun. 30, 2022
Disclosure of Leases [Abstract] |
Leases | 13. Leases Operating Leases The Company is obligated to make rental payments under non-cancellable operating leases for office, dispatch station space, and transportation equipment, expiring at various dates through 2026. Under the terms of the leases, the Company is also obligated for its proportionate share of real estate taxes, insurance and maintenance costs of the property. The Company is required to hold certain funds in restricted cash and cash equivalents accounts under some of these agreements. Certain leases for property and transportation equipment contain options to purchase, extend or terminate the lease. Determining the lease term and amount of lease payments to include in the calculation of the right-of-use (ROU) asset and lease obligations for leases containing options requires the use of judgment to determine whether the exercise of an option is reasonably certain and whether the optional period and payments should be included in the calculation of the associated ROU asset and lease obligation. In making such judgment, the Company considers all relevant economic factors that would require whether to exercise or not exercise the option. The Company’s lease agreements generally do not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach to derive an appropriate imputed discount rate. The Company benchmarked itself against other companies of similar credit ratings and comparable quality and derived imputed rates, which were used to discount its real estate lease liabilities. The Company used estimated borrowing rates of 6% on January 1, 2019, for all leases that commenced prior to that date, for office spaces and transportation equipment. Lease Costs The table below comprise lease expenses for the periods ended June 30, 2022 and 2021:
|  | Three Months Ended |  |  | Six Months Ended |
Components of total lease cost: |  | June 30, 2022 |  |  | June 30, 2021 |  |  | June 30, 2022 |  |  | June 30, 2021 |
Operating lease expense |  | $ | 428,728 |  |  | $ | 446,564 |  |  | $ | 891,353 |  |  | $ | 937,939 |
Short-term lease expense |  |  | 273,601 |  |  |  | 125,745 |  |  |  | 528,697 |  |  |  | 193,795 |
Total lease cost |  | $ | 702,329 |  |  | $ | 572,309 |  |  | $ | 1,420,050 |  |  | $ | 1,131,734 |
Lease Position as of June 30, 2022 Right-of-use lease assets and lease liabilities for the Company’s operating leases were recorded in the Condensed Consolidated Balance Sheets as follows:
|  | June 30, 2022 |  |  | December 31, 2021 |
Assets |  |  |  |  |  |
Lease right-of-use assets |  | $ | 3,812,085 |  |  | $ | 4,195,682 |
Total lease assets |  | $ | 3,812,085 |  |  | $ | 4,195,682 |
Liabilities |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Lease liability - current portion |  | $ | 1,421,036 |  |  | $ | 1,461,335 |
Noncurrent liabilities: |  |  |  |  |  |  |  |
Lease liability, net of current portion |  |  | 2,651,849 |  |  |  | 2,980,946 |
Total lease liability |  | $ | 4,072,885 |  |  | $ | 4,442,281 |
Lease Terms and Discount Rate
Weighted average remaining lease term (in years) - operating leases |  |  | 3.97 |
Weighted average discount rate - operating leases |  |  | 6.00 | %
Undiscounted Cash Flows Future minimum lease payments under the operating leases at June 30, 2022 are as follows:
|  | Operating Leases |
2022, remaining |  | $ | 891,985 |
2023 |  |  | 1,338,089 |
2024 |  |  | 897,548 |
2025 |  |  | 894,740 |
2026 |  |  | 483,775 |
2027 and thereafter |  |  | 14,625 |
Total future minimum lease payments |  |  | 4,520,762 |
Less effects of discounting |  |  | (447,877 | )
Present value of future minimum lease payments |  | $ | 4,072,885 |
Operating lease expense was approximately $428,728 and $446,564 for the three months ended June 30, 2022 and 2021, respectively. Operating lease expense was approximately $891,353 and $937,939 for the six months ended June 30, 2022 and 2021, respectively. For the three months ended June 30, 2022, the Company made $428,728 of fixed cash payments related to operating leases and $851,307 related to finance leases. For the three months ended June 30, 2021, the Company made $446,564 of fixed cash payments related to operating leases and $652,891 related to finance leases. For the six months ended June 30, 2022, the Company made $891,353 of fixed cash payments related to operating leases and $1,473,882 related to finance leases. For the six months ended June 30, 2021, the Company made $937,939 of fixed cash payments related to operating leases and $1,254,392 related to finance leases. Finance Leases The Company leases vehicles under a non-cancelable finance lease agreements with a liability of $7,931,349 and $10,139,410 as of June 30, 2022 and December 31, 2021, respectively. This includes accumulated depreciation expense of $8,837,761 and $7,095,242 as of June 30, 2022 and December 31, 2021, respectively. Depreciation expense for the vehicles under non-cancelable lease agreements amounted to $662,495 and $710,645 for the three months ended June 30, 2022 and 2021, respectively. Depreciation expense for the vehicles under non-cancelable lease agreements amounted to $1,518,276 and $1,357,457 for the six months ended June 30, 2022 and 2021, respectively. Gain on Lease Remeasurement In June 2022, the Company reassessed its finance lease estimates relating to vehicle milage and residual value. As a result, the Company determined to purchase the vehicles at the end of the leases which resulted in a gain of $1.4 million recorded as gains from lease accounting on the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income (Loss). Lease Payments The table below presents lease payments for the periods ended June 30, 2022 and 2021:
|  | Three Months Ended |  |  | Six Months Ended |
Components of total lease payment: |  | June 30, 2022 |  |  | June 30, 2021 |  |  | June 30, 2022 |  |  | June 30, 2021 |
Finance lease payment |  | $ | 851,307 |  |  | $ | 652,891 |  |  | $ | 1,473,882 |  |  | $ | 1,254,392 |
Short-term lease payment |  |  | - |  |  |  | - |  |  |  |  |  |  |  | - |
Total lease payments |  | $ | 851,307 |  |  | $ | 652,891 |  |  | $ | 1,473,882 |  |  | $ | 1,254,392 |
Lease Position as of June 30, 2022 Right-of-use lease assets and lease liabilities for the Company’s finance leases were recorded in the Condensed Consolidated Balance Sheets as follows:
|  | June 30, 2022 |  |  | December 31, 2021 |
Assets |  |  |  |  |  |
Lease right-of-use assets |  | $ | 8,408,399 |  |  | $ | 9,307,113 |
Total lease assets |  | $ | 8,408,399 |  |  | $ | 9,307,113 |
Liabilities |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Lease liability - current portion |  | $ | 2,655,037 |  |  | $ | 3,271,990 |
Noncurrent liabilities: |  |  |  |  |  |  |  |
Lease liability, net of current portion |  |  | 5,276,312 |  |  |  | 6,867,420 |
Total lease liability |  | $ | 7,931,349 |  |  | $ | 10,139,410 |
Lease Terms and Discount Rate The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s finance leases as of June 30, 2022:
Weighted average remaining lease term (in years) - finance leases |  |  | 4.14 |
Weighted average discount rate - finance leases |  |  | 6.01 | %
Undiscounted Cash Flows Future minimum lease payments under the finance leases at June 30, 2022 are as follows:
|  | Finance Leases |
2022, remaining |  |  | 1,634,535 |
2023 |  |  | 2,660,174 |
2024 |  |  | 1,930,614 |
2025 |  |  | 1,628,715 |
2026 |  |  | 826,735 |
2027 and thereafter |  |  | 133,586 |
Total future minimum lease payments |  |  | 8,814,359 |
Less effects of discounting |  |  | (883,010 | )
Present value of future minimum lease payments |  | $ | 7,931,349 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=77888251 + Details
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