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v3.23.1

Leases | 6 Months Ended
--- | ---
Jun. 30, 2022
Leases [Abstract] |
Leases | Leases The Company has entered into leases for commercial office spaces and vehicles. These leases are not unilaterally cancellable by the Company, are legally enforceable, and specify fixed or minimum amounts. The leases expire at various dates through 2026 and provide for renewal options. In the normal course of business, it is expected that these leases will be renewed or replaced by leases on other properties. The leases provide for increases in future minimum annual rental payments based on defined increases in the Consumer Price Index, subject to certain minimum increases. Also, the agreements generally require the Company to pay real estate taxes, insurance, and repairs. On November 3, 2021, the Company entered into an amendment of its Main Office Lease to include an additional 4,811 rentable square feet in the suite adjoining its main office facilities in San Diego, California. The lease term will run concurrently with the main office lease which commenced in December 2021. The lease terms include 3% annual fixed increases in the base rental payment. The lease also requires the Company to pay operating expenses such as utilities, real estate taxes, insurance, and repairs. The lease term commenced on April 15, 2022, and the Company will receive two months of rental abatement to the base rent. Supplemental unaudited consolidated balance sheet information related to leases is as follows:
|  | Classification |  | June 30, 2022
Operating lease assets |  | Right-of-use operating lease assets |  | $ | 5,195,474 |
Finance lease assets |  | Property, plant and equipment, net |  | 20,827 |
Total lease assets |  |  |  | $ | 5,216,301 |
Operating lease liabilities - current |  | Operating lease liabilities - current |  | $ | 455,064 |
Operating lease liabilities - noncurrent |  | Operating lease liabilities - noncurrent |  | 5,053,219 |
Finance lease liabilities - current |  | Other liabilities - current |  | 7,022 |
Finance lease liabilities - noncurrent |  | Other long-term liabilities |  | 15,120 |
Total lease liabilities |  |  |  | $ | 5,530,425 |
The components of lease expense are as follows:
|  |  |  | Three Months Ended June 30, |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  | Classification |  | 2022 |  | 2021 |  | 2022 |  | 2021
Operating lease expense |  | Selling, general and administrative |  | $ | 164,076 |  |  | $ | 33,396 |  |  | $ | 340,597 |  |  | $ | 91,827 |
Finance lease expense: |  |  |  |  |  |  |  |  |  |
Amortization of finance lease assets |  | Selling, general and administrative |  | 1,451 |  |  | 2,190 |  |  | 7,391 |  |  | 2,190 |
Interest on finance lease liabilities |  | Interest expense |  | 599 |  |  | 510 |  |  | 1,238 |  |  | 510 |
Total lease expense |  |  |  | $ | 166,126 |  |  | $ | 36,096 |  |  | $ | 349,226 |  |  | $ | 94,527 |
|  | Operating Lease |  | Finance Lease
Maturities of lease liabilities are as follows: |  | June 30, 2022 |  | June 30, 2022
2022 |  | $ | 127,621 |  |  | $ | 3,511 |
2023 |  | 792,918 |  |  | 7,022 |
2024 |  | 824,712 |  |  | 7,022 |
2025 |  | 822,352 |  |  | 7,022 |
2026 |  | 847,022 |  |  | — |
Thereafter |  | 4,631,866 |  |  | 1,755 |
Total lease payments |  | 8,046,491 |  |  | 26,332 |
Less: interest |  | (2,538,208) |  |  | (4,190) |
Total lease obligations |  | $ | 5,508,283 |  |  | $ | 22,142 |
Lease term and discount rate:
|  | June 30, 2022
Weighted-average remaining lease terms (in years): |  |
Operating lease |  | 9.5
Finance lease |  | 3.8
Weighted-average discount rate: |  |
Operating lease |  | 7.8%
Finance lease |  | 7.8%
Other Information:
|  |  |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  |  |  | 2022 |  | 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flows from operating leases |  |  |  | $ | 80,869 |  |  | $ | 94,818 |
Operating cash flows from finance leases |  |  |  | $ | 1,238 |  |  | $ | 510 |
Financing cash flows from finance leases |  |  |  | $ | 4,425 |  |  | $ | 1,989 |
Leased assets obtained in exchange for new finance lease liabilities |  |  |  | $ | 20,827 |  |  | $ | 29,977 |
Leased assets obtained in exchange for new operating lease liabilities |  |  |  | $ | — |  |  | $ | — |
Sublease In April 2022, the Company entered into a sublease agreement with certain local San Diego companies to sublease the Company's portion of the 4,811 square foot expansion. The term of the sublease is six months to twelve months with fixed base rental income of $2,250 per month. The sublease has no option for renewal or extension at the end of the sublease term. Sublease income are as follows:
|  |  |  | Three Months Ended June 30, |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  | Classification |  | 2022 |  | 2021 |  | 2022 |  | 2021
Sublease lease income |  | Other, net |  | $ | 20,125 |  |  | $ | — |  |  | $ | 20,125 |  |  | $ | — |
Leases | Leases The Company has entered into leases for commercial office spaces and vehicles. These leases are not unilaterally cancellable by the Company, are legally enforceable, and specify fixed or minimum amounts. The leases expire at various dates through 2026 and provide for renewal options. In the normal course of business, it is expected that these leases will be renewed or replaced by leases on other properties. The leases provide for increases in future minimum annual rental payments based on defined increases in the Consumer Price Index, subject to certain minimum increases. Also, the agreements generally require the Company to pay real estate taxes, insurance, and repairs. On November 3, 2021, the Company entered into an amendment of its Main Office Lease to include an additional 4,811 rentable square feet in the suite adjoining its main office facilities in San Diego, California. The lease term will run concurrently with the main office lease which commenced in December 2021. The lease terms include 3% annual fixed increases in the base rental payment. The lease also requires the Company to pay operating expenses such as utilities, real estate taxes, insurance, and repairs. The lease term commenced on April 15, 2022, and the Company will receive two months of rental abatement to the base rent. Supplemental unaudited consolidated balance sheet information related to leases is as follows:
|  | Classification |  | June 30, 2022
Operating lease assets |  | Right-of-use operating lease assets |  | $ | 5,195,474 |
Finance lease assets |  | Property, plant and equipment, net |  | 20,827 |
Total lease assets |  |  |  | $ | 5,216,301 |
Operating lease liabilities - current |  | Operating lease liabilities - current |  | $ | 455,064 |
Operating lease liabilities - noncurrent |  | Operating lease liabilities - noncurrent |  | 5,053,219 |
Finance lease liabilities - current |  | Other liabilities - current |  | 7,022 |
Finance lease liabilities - noncurrent |  | Other long-term liabilities |  | 15,120 |
Total lease liabilities |  |  |  | $ | 5,530,425 |
The components of lease expense are as follows:
|  |  |  | Three Months Ended June 30, |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  | Classification |  | 2022 |  | 2021 |  | 2022 |  | 2021
Operating lease expense |  | Selling, general and administrative |  | $ | 164,076 |  |  | $ | 33,396 |  |  | $ | 340,597 |  |  | $ | 91,827 |
Finance lease expense: |  |  |  |  |  |  |  |  |  |
Amortization of finance lease assets |  | Selling, general and administrative |  | 1,451 |  |  | 2,190 |  |  | 7,391 |  |  | 2,190 |
Interest on finance lease liabilities |  | Interest expense |  | 599 |  |  | 510 |  |  | 1,238 |  |  | 510 |
Total lease expense |  |  |  | $ | 166,126 |  |  | $ | 36,096 |  |  | $ | 349,226 |  |  | $ | 94,527 |
|  | Operating Lease |  | Finance Lease
Maturities of lease liabilities are as follows: |  | June 30, 2022 |  | June 30, 2022
2022 |  | $ | 127,621 |  |  | $ | 3,511 |
2023 |  | 792,918 |  |  | 7,022 |
2024 |  | 824,712 |  |  | 7,022 |
2025 |  | 822,352 |  |  | 7,022 |
2026 |  | 847,022 |  |  | — |
Thereafter |  | 4,631,866 |  |  | 1,755 |
Total lease payments |  | 8,046,491 |  |  | 26,332 |
Less: interest |  | (2,538,208) |  |  | (4,190) |
Total lease obligations |  | $ | 5,508,283 |  |  | $ | 22,142 |
Lease term and discount rate:
|  | June 30, 2022
Weighted-average remaining lease terms (in years): |  |
Operating lease |  | 9.5
Finance lease |  | 3.8
Weighted-average discount rate: |  |
Operating lease |  | 7.8%
Finance lease |  | 7.8%
Other Information:
|  |  |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  |  |  | 2022 |  | 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flows from operating leases |  |  |  | $ | 80,869 |  |  | $ | 94,818 |
Operating cash flows from finance leases |  |  |  | $ | 1,238 |  |  | $ | 510 |
Financing cash flows from finance leases |  |  |  | $ | 4,425 |  |  | $ | 1,989 |
Leased assets obtained in exchange for new finance lease liabilities |  |  |  | $ | 20,827 |  |  | $ | 29,977 |
Leased assets obtained in exchange for new operating lease liabilities |  |  |  | $ | — |  |  | $ | — |
Sublease In April 2022, the Company entered into a sublease agreement with certain local San Diego companies to sublease the Company's portion of the 4,811 square foot expansion. The term of the sublease is six months to twelve months with fixed base rental income of $2,250 per month. The sublease has no option for renewal or extension at the end of the sublease term. Sublease income are as follows:
|  |  |  | Three Months Ended June 30, |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  | Classification |  | 2022 |  | 2021 |  | 2022 |  | 2021
Sublease lease income |  | Other, net |  | $ | 20,125 |  |  | $ | — |  |  | $ | 20,125 |  |  | $ | — |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance 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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- 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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