|9 Months Ended|
Sep. 30, 2022
NOTE 12 – LEASES
The components of lease cost for operating leases for the three and nine months ended September 30, 2022 and 2021 were as follows:
Supplemental cash flow information related to leases for the nine months ended September 30, 2022 and 2021, was as follows:
The following table summarizes the lease-related assets and liabilities recorded on the balance sheet at September 30, 2022 and December 31, 2021:
The Company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable. The Company recognized an initial right of use asset and lease liability of $1,128,609 for leases entered into during the nine months ended September 30, 2022.
The following table provides the maturities of lease liabilities at September 30, 2022:
The Company closed its Denver, Colorado, store location (the Company’s only store) in June 2022 and entered into a lease termination agreement in July 2022 to relieve the Company of its future obligations under the lease. The Company has recorded a loss of $148,322 in the nine months ended September 30, 2022 related to this facility which includes the write off of prepaid rent, security deposit, right of use asset and liability and a loss on the write-off of leasehold improvements and fixtures and furniture of $46,289.
In July 2022, the Company entered into a new lease agreement for office space in Round Rock, Texas with the landlord of its current Round Rock facilities. The lease begins in August 2022 and terminates in August 2026. In connection with signing this lease, the landlord has agreed to terminate the lease on one of the current facilities that would have expired in December 2023. The additional monthly rent after consideration of the rent on the facility being canceled is not significant. As discussed in Note 7 above, the Company terminated the lease, and related amendment, as of September 30, 2022 for a leased warehouse facility in conjunction with entering into the lease agreement for office space and the above does not include any amounts related to that lease. There was an insignificant impact to the Company’s operations for the three and nine months ended September 30, 2022 due to the termination of this lease.
The total loss on lease terminations for the nine months ended September 30, 2022 was 395,138.
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.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef