Leases

12 Months Ended

Dec. 31, 2021

Leases

Leases

10. Leases

The Company leases property and equipment under operating leases, primarily office and warehouse locations. For leases with terms greater than twelve months, the related asset and obligation are recorded at the present value of the lease payments over the term. Many of these leases contain rental escalation clauses which are factored into the determination of the lease payments when appropriate. When available, the lease payments are discounted using the rate implicit in the lease; however, the Company’s current leases do not provide a readily determinable implicit rate. Therefore, the Company’s incremental borrowing rate is estimated to discount the lease payments based on information available at the lease commencement.

These leases contain both lease and non-lease components, which the Company has elected to treat as a single lease component. The Company elected not to recognize leases that have an original lease term, including reasonably certain renewal or purchase obligations, of twelve months or less in its consolidated balance sheets for all classes of underlying assets. Lease costs for such short-term leases are expensed on a straight-line basis over the lease term.

The land used by the Company to operate its seawater desalination plants in the Cayman Islands and The Bahamas is owned by the Company or leased to the Company for immaterial annual amounts and are not included in the lease amounts presented in the consolidated balance sheets.

All lease assets denominated in a foreign currency are measured using the exchange rate at the commencement of the lease. All lease liabilities denominated in a foreign currency are remeasured using the exchange rate as of the consolidated balance sheet date.

Effective March 9, 2021, the Company entered into a new office lease for the existing office located in Coral Springs, Florida under similar terms compared to the prior lease. This new lease expires, including all renewal options, on March 8, 2031.

Lease assets and liabilities

The following table presents the lease-related assets and liabilities and their respective classification on the consolidated balance sheets:

	December 31,
	2021		2020
ASSETS
Current
Prepaid expenses and other current assets	$	—	$	108,303
Current assets of discontinued operations		2,654		—
Noncurrent
Operating lease right-of-use assets		2,681,137		1,329,561
Long-term assets of discontinued operations		16,898		33,909
Total lease right-of-use assets	$	2,700,689	$	1,471,773
LIABILITIES
Current
Current maturities of operating leases	$	592,336	$	455,788
Current liabilities of discontinued operations		11,195		29,432
Noncurrent
Noncurrent operating leases		2,137,394		982,076
Noncurrent liabilities of discontinued operations		7,819		2,499
Total lease liabilities	$	2,748,744	$	1,469,795
Weighted average remaining lease term:
Operating leases		7.0 years		3.4 years
Operating leases - discontinued operations		1.6 years		1.1 years
Weighted average discount rate:
Operating leases		5.03%		4.15%
Operating leases - discontinued operations		4.77%		3.48%

The components of lease cost were as follows:

	Year Ended December 31,
	2021		2020
Operating lease costs	$	656,130	$	773,756
Short-term lease costs		79,606		5,518
Lease costs - discontinued operations		31,281		127,983
Total lease costs	$	767,017	$	907,257

Supplemental cash flow information related to leases is as follows:

	Year Ended December 31,
	2021		2020
Cash paid for amounts included in measurement of liabilities:
Operating cash outflows for operating leases	$	710,024	$	708,095
Operating cash outflows for operating leases - discontinued operations		38,246		127,153

Future lease payments relating to the Company's operating lease liabilities from continuing operations as of December 31, 2021 were as follows:

Years ending December 31,	Total
2022	$	665,817
2023		643,234
2024		390,629
2025		268,056
2026		227,541
Thereafter		1,025,239
Total future lease payments		3,220,516
Less: imputed interest		(490,786)
Total lease obligations		2,729,730
Less: current obligations		(592,336)
Noncurrent lease obligations	$	2,137,394