| 6. Leases |
6. Leases
The Company’s portfolio of leases contains both finance and
operating leases that relate to real estate agreements, vehicles and office equipment agreements.
Operating leases
Real estate agreements
The Company has several property lease agreements in Italy and Austria
and one lease agreement in the US, which have terms in excess of a twelve month period, these property leases are for our administrative
operations in these countries. The Company does not and does not intend to take ownership of the properties at the end of the lease
term.
Vehicle agreements
The Company leases several vehicles for business
use purposes, the terms of these leases range from twenty four to thirty six months. The Company does not and does not intend to
take ownership of the vehicles at the end of the lease term.
Finance Leases
Office equipment agreements
The Company has entered into several finance leases for office equipment,
the term of these leases range from thirty six to sixty months. The Company takes ownership of the office equipment at the end
of the lease term.
Right of use assets
Right of use assets included in the consolidated balance sheet are
as follows:
| |
|
December 31,
2021
|
|
December 31,
2020
|
| Non-current assets |
|
|
|
|
|
|
|
|
| Right of use assets - operating leases, net of amortization |
|
$ |
589,288 |
|
|
$ |
687,568 |
|
| Right of use assets - finance leases, net of depreciation – included in property and equipment |
|
$ |
15,520 |
|
|
$ |
27,119 |
|
Lease costs consists of the following:
| |
|
|
|
|
|
|
|
|
| |
|
Year ended December 31, |
| |
|
2021 |
|
2020 |
| Finance lease cost: |
|
$ |
10,906 |
|
|
$ |
14,040 |
|
| Amortization of right-of-use assets |
|
|
10,102 |
|
|
|
12,870 |
|
| Interest expense on lease liabilities |
|
|
804 |
|
|
|
1,170 |
|
| |
|
|
|
|
|
|
|
|
| Operating lease cost |
|
|
244,639 |
|
|
|
265,081 |
|
| |
|
|
|
|
|
|
|
|
| Total lease cost |
|
$ |
255,545 |
|
|
$ |
279,121 |
|
Other lease information:
| |
|
Year ended December 31, |
| |
|
2021 |
|
2020 |
| Cash paid for amounts included in the measurement of lease liabilities |
|
|
|
|
| Operating cash flows from finance leases |
|
$ |
(804 |
) |
|
$ |
(1,170 |
) |
| Operating cash flows from operating leases |
|
|
(244,639 |
) |
|
|
(265,081 |
) |
| Financing cash flows from finance leases |
|
|
(10,172 |
) |
|
|
(12,666 |
) |
| |
|
|
|
|
|
|
|
|
| Right-of-use assets obtained in exchange for new finance leases |
|
|
- |
|
|
|
470 |
|
| Right-of-use assets disposed of under operating leases prior to lease maturity |
|
|
(224,793 |
) |
|
|
(21,588 |
) |
| Right-of -use assets obtained in exchange for new operating leases |
|
$ |
406,276 |
|
|
$ |
84,918 |
|
| Weighted average remaining lease term – finance leases |
|
|
1.93 years |
|
|
|
2.74 years |
|
| Weighted average remaining lease term – operating leases |
|
|
2.60 years |
|
|
|
2.83 years |
|
| Weighted average discount rate – finance leases |
|
|
3.73 |
% |
|
|
3.65 |
% |
| Weighted average discount rate – operating leases |
|
|
2.73 |
% |
|
|
3.59 |
% |
Maturity of Leases
Finance lease liability
The amount of future minimum lease payments under finance leases
as of December 31, 2021 is as follows:
| Finance lease liability |
|
Amount |
| 2022 |
|
$ |
8,802 |
|
| 2023 |
|
|
7,053 |
|
| 2024 |
|
|
818 |
|
| Total undiscounted minimum future lease payments |
|
|
16,673 |
|
| Imputed interest |
|
|
(611 |
) |
| Total finance lease liability |
|
$ |
16,063 |
|
| Disclosed as: |
|
|
|
|
| Current portion |
|
$ |
8,347 |
|
| Non-Current portion |
|
|
7,716 |
|
| |
|
$ |
16,063 |
|
Operating lease liability
The amount of future minimum lease payments
under operating leases as of December 31, 2021 is as follows:
| Operating lease liability |
|
Amount |
| 2022 |
|
$ |
257,455 |
|
| 2023 |
|
|
190,132 |
|
| 2024 |
|
|
80,541 |
|
| 2025 |
|
|
46,416 |
|
| 2026 |
|
|
31,741 |
|
| Total undiscounted minimum future lease payments |
|
|
606,285 |
|
| Imputed interest |
|
|
(21,654 |
) |
| Total operating lease liability |
|
$ |
584,631 |
|
| Disclosed as: |
|
|
|
|
| Current portion |
|
$ |
244,467 |
|
| Non-Current portion |
|
|
340,164 |
|
| |
|
$ |
584,631 |
|
|