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Commitments and Contingencies
 6 Months Ended
Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

11. Commitments and Contingencies

 

From time to time we are involved in legal proceedings, claims and litigation related to employee claims, contractual disputes and taxes in the ordinary course of business. Although we cannot predict the outcome of such matters, currently we have no reason to believe the disposition of any current matter could reasonably be expected to have a material adverse impact on our financial position, results of operations or the ability to carry on any of our business activities.

 

Operating Leases

 

For each of the below listed leases, management has determined it will utilize the base rental period and have not considered any renewal periods.

 

Location  Square Feet   Monthly Rent   Lease Expiry
Columbus, OH   6,000   $5,100   December 31, 2028
Madison Heights, MI   36,000   $43,185   August 31, 2026
Sterling Heights, MI   37,000   $21,072   April 30, 2028
Traverse City, MI   5,200   $4,500   January 31, 2024
              
Temporary space             
Madison Heights, MI   3,200   $1,605   month to month
              
Vehicles             
various    n/a    $2,708   September 30, 2028

 

The following table sets forth the future minimum lease payments under our leases:

 

For the twelve months ending June 30,  Finance Lease   Operating Leases 
2024  $41,259   $930,559 
2025   41,259    891,357 
2026   41,259    901,152 
2027   41,259    443,008 
2028   39,243    311,010 
Thereafter   8,299    35,100 
Less Imputed Interest     (38,395)       (488,818)  
Less Short-term lease payments             (4,813)  
   $174,183   $3,018,555 

 

 

The following table summarizes the components of lease expense:

 

For the three months ending June 30,  2023   2022 
Finance lease expense:          
Amortization of ROU asset  $8,252   $- 
Interest on lease liabilities   3,594    - 
Operating lease expense   238,864    238,487 
Short-term lease expense   4,814    4,814 

 

For the six months ending June 30,  2023   2022 
Finance lease expense:          
Amortization of ROU asset  $14,959   $- 
Interest on lease liabilities   6,426    - 
Operating lease expense   476,312    476,975 
Short-term lease expense   9,627    9,627 

 

The following tables set forth additional information pertaining to our leases:

  

For the six months ending June 30,  2023   2022 
Cash paid for amounts included in the measurement of lease liabilities:          
Financing cash flows from finance leases (interest)  $6,426   $- 
Financing cash flows from finance leases (principal)   12,312    - 
Operating cash flows from operating leases   348,284    307,471 
Weighted average remaining lease term – finance leases   5.2 years    - 
Weighted average remaining lease term – operating leases   4.0 years    4.9 years 
Weighted average discount rate – finance leases   8.25%   - 
Weighted average discount rate – operating leases   6.95%   7.01%

 

   June 30, 2023   December 31, 2022 
Operating leases:          
Right-of-use assets, operating  $2,895,784   $3,200,191 
Lease liabilities, operating – current   711,229    692,074 
Lease liabilities, operating – net of current   2,307,326    2,624,608 
Total operating lease liabilities  $3,018,555   $3,316,682 
           
Finance leases:          
Right-of-use asset, finance  $191,862   $160,990 
Accumulated amortization   (21,668)   (6,708)
Right-of-use asset, finance, net  $170,194   $154,282 
           
Lease liability, finance – current  $28,303   $22,493 
Lease liability, finance – net of current   145,880    133,131 
Total finance lease liability  $174,183   $155,624