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LEASES

3 Months Ended

Mar. 31, 2022

NOTE 13 – LEASES

The Company has various lease agreements with terms up to 10 years, comprising leases of office space, cars leases for the distribution of pharmaceutical products, equipment hires, etc. 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.

Operating Leases

The Company’s weighted-average remaining lease term relating to its operating leases is 6.47 years, with a weighted-average discount rate of 6.74%.

The Company incurred lease expense for its operating leases of $54,124 and $65,577 which was included in “General and administrative expenses,” for the three months ended March 31, 2022 and 2021, respectively.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of March 31, 2022.

Maturity of Lease Liability
Remainder of 2022	$	154,095
2023		177,914
2024		108,485
2025		108,485
Thereafter		408,810
Total undiscounted operating lease payments	$	957,789
Less: Imputed interest		(182,247	)
Present value of operating lease liabilities		775,542

Finance leases

The Company’s weighted-average remaining lease term relating to its finance leases is 2.93 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 March 31, 2022.

Maturity of Lease Liability
Remainder of 2022	$	62,941
2023		73,387
2024		56,654
2025		26,870
Thereafter		3,694
Total undiscounted finance lease payments	$	223,546
Less: Imputed interest		(20,669	)
Present value of finance lease liabilities	$	202,877

The Company incurred interest expense on its finance leases of $3,507 which was included in “Interest expense,” for the three months ended March 31, 2022. The Company incurred amortization expense on its finance leases of $19,580 which was included in “Depreciation and amortization expense,” for the three months ended March 31, 2022. The total cash used for the Company’s finance leases for the three months ended March 31, 2022 amounted to $22,358.