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Leases

12 Months Ended

Dec. 31, 2022

10. Leases

The Company’s leases consist primarily of leases for office and warehouse space. 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 is 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.

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,
	2022		2021
ASSETS
Current
Prepaid expenses and other current assets	$	35,624	$	—
Current assets of discontinued operations		7,979		2,654
Noncurrent
Operating lease right-of-use assets		2,058,384		2,681,137
Long-term assets of discontinued operations		—		16,898
Total lease right-of-use assets	$	2,101,987	$	2,700,689

LIABILITIES
Current
Current maturities of operating leases	$	546,851	$	592,336
Current liabilities of discontinued operations		7,361		11,195
Noncurrent
Noncurrent operating leases		1,590,542		2,137,394
Noncurrent liabilities of discontinued operations		—		7,819
Total lease liabilities	$	2,144,754	$	2,748,744

Weighted average remaining lease term:
Operating leases		6.6 years		7.0 years
Operating leases - discontinued operations		0.8 years		1.6 years

Weighted average discount rate:
Operating leases		5.11%		5.03%
Operating leases - discontinued operations		4.96%		4.77%

The components of lease cost were as follows:


	Year Ended December 31,
	2022		2021
Operating lease costs	$	692,404	$	656,130
Short-term lease costs		100,975		79,606
Lease costs - discontinued operations		40,021		31,281
Total lease costs	$	833,400	$	767,017

Supplemental cash flow information related to leases is as follows:

Future lease payments relating to the Company's operating lease liabilities from continuing operations as of December 31, 2022 are as follows:


Years ending December 31,	Total
2023	$	643,233
2024		390,630
2025		268,056
2026		227,542
2027		229,416
Thereafter		778,460
Total future lease payments		2,537,337
Less: imputed interest		(399,944)
Total lease obligations		2,137,393
Less: current obligations		(546,851)
Noncurrent lease obligations	$	1,590,542

Year Ended December 31,

Cash paid for amounts included in measurement of liabilities:

Operating cash outflows for operating leases

Operating cash outflows for operating leases - discontinued operations