Leases

3 Months Ended

Mar. 31, 2023

Leases

Leases

6. Leases

Right of use assets are included in the consolidated balance sheet are as follows:

	March 31, 2023		December 31, 2022
Non-current assets
Right-of-use assets – finance leases, net of depreciation, included in Property and equipment	$	35,281	$	38,079
Right-of-use assets - operating leases, net of amortization	$	1,322,851	$	1,393,071

Lease costs consists of the following: 

	Three  months ended March 31,
	2023		2022
Finance lease cost:
Amortization of right-of-use assets	$	2,797	$	2,797
Interest expense on finance lease liabilities		526		648
		3,323		3,445
Operating lease cost	$	86,127	$	63,064
Lease cost	$	89,450	$	186,727

Other lease information: 

	Three months ended March 31,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	(526	)	$	(648	)
Operating cash flows from operating leases		(86,127	)		(63,064	)
Financing cash flows from finance leases		(1,944	)		(1,809	)
Cash paid for amounts included in the measurement of lease liabilities	$	(88,597	)	$	(65,521	)
Weighted average lease term – finance leases		3 years and seven months			4 years and seven months
Weighted average remaining lease term – operating leases		3 years and 10 months			4 years and 10 months
Discount rate – finance leases		6.60	%		6.61	%
Discount rate – operating leases		4.64	%		4.64	%

Maturity of Leases

Finance lease liability

The amount of future minimum lease payments under finance leases as of March 31, 2023 is as follows:

	Amount
Remainder of 2023	$	7,372
2024		9,829
2025		9,829
2026		6,195
2027		1,707
		34,932
Imputed interest		(4,032	)
Total finance lease liability	$	30,900
Disclosed as:
Current portion	$	8,017
Non-Current portion		22,883
Lease liability	$	30,900

Operating lease liability

The amount of future minimum lease payments under operating leases are as follows:

	Amount
Remainder of 2023	$	262,549
2024		366,110
2025		384,416
2026		403,637
2027		33,771
Total undiscounted minimum future lease payments		1,450,483
Imputed interest		(25,465	)
Total operating lease liability	$	1,425,017
Disclosed as:
Current portion	$	299,027
Non-Current portion		1,125,990
Lease liability	$	1,425,017

Lessor Property

The Company’s wholly owned subsidiary CCH owns a property located at 3571 Muskoka Road, #169, Bala, on which the operations of the Canadian Rehab Clinic were located prior to disposal on February 14, 2017, The property is leased to the purchasers of the business of the Canadian Rehab Clinic, initially for a period of 5 years, which was renewed for an additional 5 years, with a further two 5 year renewal periods available to the lessee. The lessee has an option to acquire the property for CDN$10 million. The Company considers the likelihood of the option being exercised as remote at this time.

The Lease was considered in terms of ASC 842, Leases and determined to be an operating lease as the criteria for the lease to be a sales-type lease or a direct financing lease were not met, including the possibility of the lessee exercising the option to purchase the property being considered as remote.

The Company derived rental income of CDN$126 942 ($89,419) for the three months ended March 31, 2023.