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Leases

3 Months Ended

Mar. 31, 2024

6. 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 condensed 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.

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 condensed consolidated balance sheet date.

Lease assets and liabilities

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


	March 31,		December 31,
	2024		2023
ASSETS
Current
Prepaid expenses and other current assets	$	27,786	$	110,541
Current assets of discontinued operations		—		—
Noncurrent
Operating lease right-of-use assets		2,052,610		2,135,446
Total lease right-of-use assets	$	2,080,396	$	2,245,987

LIABILITIES
Current
Current maturities of operating leases	$	381,423	$	456,865
Current liabilities of discontinued operations		—		—
Noncurrent
Noncurrent operating leases		1,735,851		1,827,302
Total lease liabilities	$	2,117,274	$	2,284,167

Weighted average remaining lease term:
Operating leases		6.1 years		6.1 years

Weighted average discount rate:
Operating leases		5.71%		5.67%

The components of lease costs were as follows:


	Three Months Ended March 31,
	2024		2023
Operating lease costs	$	205,872	$	170,378
Short-term lease costs		69,709		25,346
Lease costs - discontinued operations		12,120		10,786
Total lease costs	$	287,701	$	206,510

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 March 31, 2024 were as follows:


Years ending December 31,	Total
2024	$	380,322
2025		462,990
2026		379,019
2027		336,597
2028		341,687
Thereafter		639,929
Total future lease payments		2,540,544
Less: imputed interest		(423,270)
Total lease obligations		2,117,274
Less: current obligations		(381,423)
Noncurrent lease obligations	$	1,735,851

Three Months Ended March 31,

Cash paid for amounts included in measurement of liabilities:

Operating cash outflows for operating leases

Operating cash outflows for operating leases - discontinued operations