Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Note 10 – Leases

The following amounts were recorded on the Consolidated Balance Sheets relating to the Company’s operating and finance leases.

		December 31,		December 31,
		2023		2022
Right-of-Use Assets
Operating lease right-of-use assets	$	10,721,375	$	16,315,342
Lease Liabilities:
Operating lease liabilities	$	13,570,976	$	18,079,469
Finance Lease cost
Amortization of right-of-use assets	$	1,743,370	$	827,191
Interest on lease liabilities		172,888		35,633
Total finance lease cost	$	1,916,258	$	862,824
		December 31,		December 31,
		2023		2022
Operating leases
Weighted average remaining lease term		5.0 years		5.9 years
Weighted average discount rate		12%		7%
Finance Leases
Weighted average remaining lease term		2.6 years		1.1 years
Weighted average discount rate		6%		4%

As the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date. Upon transition to ASC Topic 842, the Company used the incremental borrowing rate on January 1, 2022 for all operating leases that commenced prior to that date. The Company has operating leases primarily for office space. Lease costs are generally fixed, with certain contracts containing escalations in the lessors’ annual costs. During fiscal year 2023, certain leases were modified due to non-payment of rent which triggered remeasurement and reduction of lease liability and right-of-use assets. At December 31, 2023, the Company is in default of its primary office leases, distribution center lease and car fleet lease, providing the ability for lessors the ability to evict the Company from its premises or repossess the vehicles.

For the years ended December 31, 2023, and 2022, rent expense including short-term leases was $7.4 million and $4.2 million, respectively. Operating lease expense included in rent expense was $4.6 million and $3.0 million respectively. Cash paid for amounts included in operating lease liabilities was $3.5 million and $3.1 million as of December 31, 2023 and December 31, 2022, respectively.

The expected future payments relating to the operating and finance lease liabilities at December 31, 2023 are as follows:

	Operating		Financing
2024	$	5,333,922	$	1,814,953
2025		3,981,337		1,561,380
2026		2,104,048		1,213,515
2027		1,643,022		261,544
2028		1,495,221		—
Thereafter		3,735,105		—
Total minimum payments		18,292,655		4,851,392
Less: amounts representing interest		(4,721,679)		(469,080)
Present value of minimum payments	$	13,570,976	$	4,382,312