Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.22.2.2
Leases
9 Months Ended
Sep. 30, 2022
Leases [Abstract]  
Leases LEASES
We have entered into various operating and finance lease agreements for offices, manufacturing and warehouse facilities. We determine if an arrangement is a lease, or contains a lease provision, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for our use by the lessor.
Our leases may include options to extend the lease term for up to 5 years. Some of our leases also include options to terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain we will exercise such options.
During the second quarter of 2022, we entered into a lease agreement for additional office and warehouse space. We obtained a Letter of Credit (“LOC”) in the amount of $0.5 million to secure the lease, which bears interest at 5.0% per annum. Under the terms of the agreement, the landlord may use the whole or any part of the LOC for the payment of any amount as to which we are in default or to compensate the landlord for certain specified losses or damage.

Lease expense for operating leases is recognized on a straight-line basis over the lease term as either cost of sales or operating expenses depending on the nature of the leased asset.
Three Months Ended September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Short-term lease expense $ 179,704  $ 190,178  $ 603,712  $ 539,961 
Operating lease expense 521,566  —  1,284,533  — 
Total lease expense $ 701,270  $ 190,178  $ 1,888,245  $ 539,961 
Lease right-of-use assets consisted of the following:
September 30, 2022 December 31, 2021
Operating leases $ 5,604,800  $ 1,538,852 
Finance leases 5,872,127  — 
Total lease right-of-use assets $ 11,476,927  $ 1,538,852 

Lease liabilities consisted of the following:
September 30, 2022 December 31, 2021
Operating leases $ 6,539,980  $ 1,554,767 
Finance leases 3,301,751  — 
Total lease liabilities 9,841,731  1,554,767 
Less: current portion (1,105,016) (363,714)
Long-term portion $ 8,736,715  $ 1,191,053 
Lessee LEASES
We have entered into various operating and finance lease agreements for offices, manufacturing and warehouse facilities. We determine if an arrangement is a lease, or contains a lease provision, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for our use by the lessor.
Our leases may include options to extend the lease term for up to 5 years. Some of our leases also include options to terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain we will exercise such options.
During the second quarter of 2022, we entered into a lease agreement for additional office and warehouse space. We obtained a Letter of Credit (“LOC”) in the amount of $0.5 million to secure the lease, which bears interest at 5.0% per annum. Under the terms of the agreement, the landlord may use the whole or any part of the LOC for the payment of any amount as to which we are in default or to compensate the landlord for certain specified losses or damage.

Lease expense for operating leases is recognized on a straight-line basis over the lease term as either cost of sales or operating expenses depending on the nature of the leased asset.
Three Months Ended September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Short-term lease expense $ 179,704  $ 190,178  $ 603,712  $ 539,961 
Operating lease expense 521,566  —  1,284,533  — 
Total lease expense $ 701,270  $ 190,178  $ 1,888,245  $ 539,961 
Lease right-of-use assets consisted of the following:
September 30, 2022 December 31, 2021
Operating leases $ 5,604,800  $ 1,538,852 
Finance leases 5,872,127  — 
Total lease right-of-use assets $ 11,476,927  $ 1,538,852 

Lease liabilities consisted of the following:
September 30, 2022 December 31, 2021
Operating leases $ 6,539,980  $ 1,554,767 
Finance leases 3,301,751  — 
Total lease liabilities 9,841,731  1,554,767 
Less: current portion (1,105,016) (363,714)
Long-term portion $ 8,736,715  $ 1,191,053