| 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 U.S. 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 forty-eight 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 condensed consolidated balance sheet are as follows:
| |
|
September 30, 2023
|
|
December 31, 2022
|
| Non-current assets |
|
|
|
|
|
|
|
|
| Right of use assets - operating leases, net of amortization |
|
$ |
1,471,190 |
|
|
$ |
1,498,703 |
|
| Right of use assets - finance leases, net of depreciation – included in property and equipment |
|
$ |
3,240 |
|
|
$ |
8,884 |
|
Lease costs consists of the
following:
| |
|
|
|
|
|
|
|
|
| |
|
Nine Months Ended September 30, |
| |
|
2023 |
|
2022 |
| Finance lease cost: |
|
|
|
|
|
|
|
|
| Amortization of financial lease assets |
|
$ |
5,654 |
|
|
$ |
5,726 |
|
| Interest expense on lease liabilities |
|
|
263 |
|
|
|
348 |
|
| |
|
|
|
|
|
|
|
|
| Operating lease cost |
|
|
378,996 |
|
|
|
257,582 |
|
| |
|
|
|
|
|
|
|
|
| Total lease cost |
|
$ |
384,913 |
|
|
$ |
263,656 |
|
Other lease information:
| |
|
Nine Months ended September 30, |
| |
|
2023 |
|
2022 |
| Cash paid for amounts included in the measurement of lease liabilities |
|
|
|
|
| Operating cash flows from finance leases |
|
$ |
(263 |
) |
|
$ |
(348 |
) |
| Operating cash flows from operating leases |
|
|
(378,996 |
) |
|
|
(257,582 |
) |
| Financing cash flows from finance leases |
|
|
(5,996 |
) |
|
|
(5,926 |
) |
| |
|
|
|
|
|
|
|
|
| Weighted average remaining lease term – finance leases |
|
|
2.23 years |
|
|
|
1.24 years |
|
| Weighted average remaining lease term – operating leases |
|
|
3.83 years |
|
|
|
4.64 years |
|
| |
|
|
|
|
|
|
|
|
| Weighted average discount rate – finance leases |
|
|
6.72 |
% |
|
|
3.73 |
% |
| Weighted average discount rate – operating leases |
|
|
3.15 |
% |
|
|
2.83 |
% |
Maturity
of Leases
Finance
lease liability
The amounts of future minimum lease
payments under finance leases are as follows:
| Finance Lease Liability |
|
Amount |
| Remainder of 2023 |
|
$ |
931 |
|
| 2024 |
|
|
1,243 |
|
| 2025 |
|
|
481 |
|
| 2026 |
|
|
481 |
|
| 2027 |
|
|
362 |
|
| Total undiscounted minimum future lease payments |
|
|
3,498 |
|
| Imputed interest |
|
|
(359 |
) |
| Total finance lease liability |
|
$ |
3,139 |
|
| |
|
|
|
|
| Disclosed as: |
|
|
|
|
| Current portion |
|
$ |
1,895 |
|
| Non-Current portion |
|
|
1,244 |
|
| |
|
$ |
3,139 |
|
Operating
lease liability
The amounts
of future minimum lease payments under operating leases are as follows:
| Operating lease liability |
|
|
Amount |
|
| Remainder of 2023 |
|
$ |
111,786 |
|
| 2024 |
|
|
416,498 |
|
| 2025 |
|
|
380,444 |
|
| 2026 |
|
|
324,434 |
|
| 2027 and thereafter |
|
|
263,367 |
|
| Total undiscounted minimum future lease payments |
|
|
1,496,529 |
|
| Imputed interest |
|
|
(55,120 |
) |
| Total operating lease liability |
|
$ |
1,441,409 |
|
| |
|
|
|
|
| Disclosed as: |
|
|
|
|
| Current portion |
|
$ |
381,439 |
|
| Non-Current portion |
|
|
1,059,970 |
|
| |
|
$ |
1,441,409 |
|
|