| Commitments and Contingencies |
Commitments and ContingenciesLeases
The table below summarizes the components of lease expense and income statement location for the three and nine months ended September 30, 2023 and 2022:
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Line Item in the
Company’s Condensed Consolidated
Income Statements |
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Three Months Ended
September 30, 2023 |
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Three Months Ended
September 30, 2022 |
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Nine Months Ended
September 30, 2023 |
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Nine Months Ended
September 30, 2022 |
| Finance lease costs: |
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| Amortization of assets |
Depreciation and amortization |
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$ |
7,570 |
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$ |
7,570 |
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$ |
22,709 |
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$ |
48,001 |
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| Interest on lease liabilities |
Other expense, net |
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760 |
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1,015 |
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2,473 |
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3,564 |
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| Total finance lease costs |
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8,330 |
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8,585 |
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25,182 |
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51,565 |
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| Operating lease costs |
General and administrative expenses |
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1,633,469 |
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$ |
1,426,010 |
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4,910,181 |
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$ |
4,138,801 |
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| Total lease costs |
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$ |
1,641,799 |
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$ |
1,434,595 |
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$ |
4,935,363 |
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$ |
4,190,366 |
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Supplemental information and balance sheet location related to leases (excluding amounts related to leases classified as held for sale) is as follows:
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September 30, 2023 |
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December 31, 2022 |
| Operating Leases: |
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| Operating lease right-of -use asset |
$19,803,896 |
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$20,587,199 |
| Operating lease liability - current portion |
$5,392,944 |
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$5,295,830 |
| Operating lease liability - net of current portion |
17,200,146 |
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18,672,719 |
| Total operating lease liability |
$22,593,090 |
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$23,968,549 |
| Finance Leases: |
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| Property and equipment, at cost |
$151,396 |
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$151,396 |
| Less accumulated amortization |
(110,362) |
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(87,652) |
| Property and equipment, net |
$41,034 |
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$63,744 |
| Finance lease liability - current portion |
25,223 |
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24,433 |
| Finance lease liability - net of current portion |
44,490 |
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63,507 |
| Total finance lease liabilities |
$69,713 |
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$87,940 |
| Weighted average remaining lease term (in years): |
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| Operating leases |
5.1 |
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5.4 |
| Finance lease |
2.6 |
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3.4 |
| Weighted average discount rate: |
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| Operating leases |
5.1 |
% |
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4.8 |
% |
| Finance leases |
4.3 |
% |
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4.3 |
% |
Supplemental cash flow information related to leases is as follows:
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Nine Months Ended
September 30, 2023 |
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Nine Months Ended
September 30, 2022 |
| Cash paid for amounts included in measurement of liabilities: |
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| Operating cash flows from operating leases |
$ |
5,263,092 |
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$ |
4,309,229 |
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| Operating cash flows from finance leases |
2,473 |
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3,564 |
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| Financing cash flows from finance leases |
18,227 |
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43,907 |
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| Non-cash transactions: ROU assets obtained in exchange for lease liabilities |
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| Operating lease |
$ |
4,287,622 |
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$ |
4,402,229 |
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| Finance lease |
— |
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— |
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`
Maturities of lease liabilities as of September 30, 2023 were as follows:
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Operating Leases |
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Finance Lease |
| 2023 (remainder) |
$ |
1,633,006 |
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$ |
6,900 |
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| 2024 |
6,236,923 |
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27,600 |
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| 2025 |
5,592,674 |
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27,600 |
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| 2026 |
3,979,181 |
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11,500 |
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| 2027 |
3,099,193 |
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— |
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| Thereafter |
5,193,199 |
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— |
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| Total lease payments |
$ |
25,734,176 |
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$ |
73,600 |
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| Less: Imputed interest |
(3,141,086) |
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(3,887) |
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| Total lease obligations |
22,593,090 |
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69,713 |
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| Less: Current obligations |
(5,392,944) |
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(25,223) |
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| Long-term lease obligation |
$ |
17,200,146 |
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$ |
44,490 |
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All leases entered into by the Company have commenced as of September 30, 2023.
Guarantee in Connection with the Sale of the Divested Business
In connection with the sale of a company-managed clinic in 2022, the Company guaranteed one future operating lease commitment assumed by the buyers. The Company is obligated to perform under the guarantee if the buyers fail to perform under the lease agreement at any time during the remainder of the lease agreement, which expires on May 31, 2027. At the date of sale, the undiscounted maximum potential future payments totaled $247,296. As of September 30, 2023, the undiscounted remaining lease payments under the agreement totaled $196,896. The Company had not recorded a liability with respect to the guarantee obligation as of September 30, 2023, as the Company concluded that payment under the lease guarantee was not probable.
Litigation In the normal course of business, the Company is party to litigation and claims from time to time. The Company maintains insurance to cover certain litigation and claims.
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