Quarterly report pursuant to Section 13 or 15(d)

Leases

Leases

3 Months Ended

Mar. 31, 2022

Our leases principally consist of operating leases related to our corporate office, field offices, and our research, manufacturing and storage facilities.

At inception, we determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of our lease agreements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. maintenance, labor charges, etc.). We account for each component separately based on the estimated standalone price of each component.

Operating leases are included in Right-of-use assets, Lease obligations, current and Lease obligations, long term on the condensed consolidated balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term and using an incremental borrowing rate consistent with the lease terms or implicit rates, when readily determinable. For those leases where it is reasonably certain at the commencement date that we will exercise the option to extend the lease, then the lease term will include the lease extension term. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

Lease expense for operating leases, which principally consist of fixed payments for base rent, is recognized on a straight-line basis over the lease term. Lease expense for the three months ended March 31, 2022 and 2021 was $196,979 and and $195,273, respectively.

Supplemental information related to leases for the three months ended March 31, 2022 was as follows:


	Three Months Ended
	March 31, 2022			March 31, 2021
Cash paid for amounts included in the measurement of operating lease liabilities	$	181,661		$	171,502
Right-of-use assets obtained in exchange for operating lease liabilities	$	—		$	721,429
Weighted-average remaining lease term - operating leases	3.80 years			4.50 years
Weighted-average discount rate - operating leases	6		%	6		%

Supplemental information related to operating leases as of March 31, 2022 and December 31, 2021 was as follows:


	March 31, 2022		December 31, 2021
Operating leases
Right-of-use assets	$	1,716,737	$	1,869,210

Operating lease liability, current	$	653,176	$	641,002
Operating lease liability, long-term	1,147,982		1,315,275
Total operating lease liability	$	1,801,158	$	1,956,277

Future minimum lease commitments under non-cancellable operating leases as of March 31, 2022 were as follows:


	Operating Leases
Year 1	$	552,222
Year 2	745,244
Year 3	299,248
Year 4	108,785
Year 5	102,978
Thereafter	228,150
Total lease payments	2,036,627
Less: imputed interest	235,469
Total	$	1,801,158