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LEASES

9 Months Ended

Sep. 30, 2021

NOTE 12 – LEASES

The Company has various lease agreements with terms up to 10 years, comprising leases of office space. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

The assets and liabilities from operating and finance leases are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, we use a discount rate based on our incremental borrowing rate, which is determined using the interest rate of our long-term debt on the date of inception.

The Company’s weighted-average remaining lease term relating to its operating leases is 6.63 years, with a weighted-average discount rate of 6.74%.

The Company incurred lease expense for its operating leases of $146,831 and $148,218 which was included in “General and administrative expenses,” for the nine months ended September 30, 2021 and 2020, respectively.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of September 30, 2021.

Maturity of Lease Liability
Remainder of 2021	$	63,464
2022		223,010
2023		198,872
2024		116,255
2025		112,144
Thereafter		421,509
Total undiscounted operating lease payments	$	1,135,254
Less: Imputed interest		(221,621	)
Present value of operating lease liabilities	$	913,633

The Company’s weighted-average remaining lease term relating to its finance leases is 3.44 years, with a weighted-average discount rate of 6.74%.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s finance leases as of September 30, 2021.

Maturity of Lease Liability
Remainder of 2021	$	26,268
2022		93,492
2023		80,119
2024		62,191
2025		31,959
Thereafter		2,005
Total undiscounted finance lease payments	$	296,034
Less: Imputed interest		(32,795	)
Present value of finance lease liabilities	$	263,239

The Company incurred interest expense on its finance leases of $9,995 which was included in “Interest expense,” for the nine months ended September 30, 2021. The Company incurred amortization expense on its finance leases of $80,287 which was included in “Depreciation and amortization expense,” for the nine months ended September 30, 2021.