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LEASES

6 Months Ended

Jun. 30, 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 5.83 years, with a weighted-average discount rate of 6.74%.

The Company incurred lease expense for its operating leases of $108,198 and $99,610 which was included in “General and administrative expenses,” for the six months ended June 30, 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 June 30, 2022.

Maturity of Lease Liability
Remainder of 2022	$	104,097
2023		208,195
2024		208,195
2025		136,952
Thereafter		380,823
Total undiscounted operating lease payments	$	1,038,262
Less: Imputed interest		(180,239	)
Present value of operating lease liabilities		858,023

Finance leases

The Company’s weighted-average remaining lease term relating to its finance leases is 1.92 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 June 30, 2022.

Maturity of Lease Liability
Remainder of 2022	$	48,385
2023		87,349
2024		71,591
2025		43,547
Thereafter		24,868
Total undiscounted finance lease payments	$	275,740
Less: Imputed interest		(28,403	)
Present value of finance lease liabilities	$	247,337

The Company incurred interest expense on its finance leases of $7,333 which was included in “Interest expense,” for the six months ended June 30, 2022. The Company incurred amortization expense on its finance leases of $39,606 which was included in “Depreciation and amortization expense,” for the six months ended June 30, 2022. The total cash used for the Company’s finance leases for the three months ended June 30, 2022 amounted to $43,804.