Annual report pursuant to Section 13 and 15(d)

LEASES

v3.22.4
LEASES
 12 Months Ended
Dec. 31, 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, 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.
We have elected not to disclose in the Consolidated Balance Sheet leases with a lease term of 12 months or less at lease inception that do not contain a purchase option or renewal term provision we are reasonably certain to exercise. All other lease right-of-use assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of our leases do not provide an implicit rate of return, we used our incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments.
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 that we will exercise such options.

Lease expense for operating leases is recognized on a straight-line basis over the lease term as cost of sales or operating expenses depending on the nature of the lease right-of-use asset.
Years Ended December 31,
2022
2021
 2020
Short-term lease expense $ 589,969  $ 599,129  $ 145,585 
Operating lease expense 1,782,332  58,224  — 
Total lease expense $ 2,372,301  $ 657,353  $ 145,585 
Lease right-of-use assets consisted of the following:
December 31,
2022 2021
Operating leases $ 5,884,865  $ 1,538,852 
Finance leases 5,821,938  — 
Total lease right-of-use assets $ 11,706,803  $ 1,538,852 
Lease liabilities consisted of the following:
December 31,
2022 2021
Operating leases $ 6,977,896  $ 1,554,767 
Finance leases 3,147,198  — 
Total lease liabilities 10,125,094  1,554,767 
Less: current portion (1,285,032) (363,714)
Long-term portion $ 8,840,062  $ 1,191,053 
Other information related to leases is as follows:
As of December 31,
2022
2021
 2020
Weighted-average remaining lease term
Operating leases 6.0 years 4.0 years N/A
Financing leases 2.0 years N/A N/A
Weighted-average interest rate
Operating leases 10.0  % 10.0  % N/A
Financing leases 10.0  % N/A N/A
Supplemental cash flow information related to leases where we are the lessee is as follows:
Years Ended December 31,
2022
2021
 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases $ 770,642  $ 657,353  $ 145,585 
Operating cash outflows from finance leases (interest payments) 369,976  —  — 
Financing cash outflows from finance leases 857,516  —  — 
Leased assets obtained in exchange for finance lease liabilities 6,022,694  —  — 
Leased assets obtained in exchange for operating lease liabilities 5,631,558  1,577,774  — 

As of December 31, 2022, the maturities of our operating and finance lease liabilities (excluding short-term leases) are as follows:
Operating
Leases		 Finance
Leases
2023 $ 1,356,374  $ 879,444 
2024 1,589,805  2,752,862 
2025 1,458,783  — 
2026 1,503,068  — 
2027 1,316,387  — 
Thereafter 2,295,179  — 
Total minimum lease payments 9,519,596  3,632,306 
Less: Interest 2,541,700  485,108 
Present value of lease obligations 6,977,896  3,147,198 
Less: Current portion 686,018  599,014 
Long-term portion of lease obligations $ 6,291,878  $ 2,548,184 
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, 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.
We have elected not to disclose in the Consolidated Balance Sheet leases with a lease term of 12 months or less at lease inception that do not contain a purchase option or renewal term provision we are reasonably certain to exercise. All other lease right-of-use assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of our leases do not provide an implicit rate of return, we used our incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments.
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 that we will exercise such options.

Lease expense for operating leases is recognized on a straight-line basis over the lease term as cost of sales or operating expenses depending on the nature of the lease right-of-use asset.
Years Ended December 31,
2022
2021
 2020
Short-term lease expense $ 589,969  $ 599,129  $ 145,585 
Operating lease expense 1,782,332  58,224  — 
Total lease expense $ 2,372,301  $ 657,353  $ 145,585 
Lease right-of-use assets consisted of the following:
December 31,
2022 2021
Operating leases $ 5,884,865  $ 1,538,852 
Finance leases 5,821,938  — 
Total lease right-of-use assets $ 11,706,803  $ 1,538,852 
Lease liabilities consisted of the following:
December 31,
2022 2021
Operating leases $ 6,977,896  $ 1,554,767 
Finance leases 3,147,198  — 
Total lease liabilities 10,125,094  1,554,767 
Less: current portion (1,285,032) (363,714)
Long-term portion $ 8,840,062  $ 1,191,053 
Other information related to leases is as follows:
As of December 31,
2022
2021
 2020
Weighted-average remaining lease term
Operating leases 6.0 years 4.0 years N/A
Financing leases 2.0 years N/A N/A
Weighted-average interest rate
Operating leases 10.0  % 10.0  % N/A
Financing leases 10.0  % N/A N/A
Supplemental cash flow information related to leases where we are the lessee is as follows:
Years Ended December 31,
2022
2021
 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases $ 770,642  $ 657,353  $ 145,585 
Operating cash outflows from finance leases (interest payments) 369,976  —  — 
Financing cash outflows from finance leases 857,516  —  — 
Leased assets obtained in exchange for finance lease liabilities 6,022,694  —  — 
Leased assets obtained in exchange for operating lease liabilities 5,631,558  1,577,774  — 

As of December 31, 2022, the maturities of our operating and finance lease liabilities (excluding short-term leases) are as follows:
Operating
Leases		 Finance
Leases
2023 $ 1,356,374  $ 879,444 
2024 1,589,805  2,752,862 
2025 1,458,783  — 
2026 1,503,068  — 
2027 1,316,387  — 
Thereafter 2,295,179  — 
Total minimum lease payments 9,519,596  3,632,306 
Less: Interest 2,541,700  485,108 
Present value of lease obligations 6,977,896  3,147,198 
Less: Current portion 686,018  599,014 
Long-term portion of lease obligations $ 6,291,878  $ 2,548,184