| Commitments and Contingencies |
Commitments and Contingencies Leases
The table below summarizes the components of lease expense and income statement location for the years ended December 31, 2021 and December 31, 2020:
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Years Ended December 31, |
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Line Item in the Company’s Consolidated Income Statements |
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2021 |
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2020 |
| Finance lease costs: |
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| Amortization of assets |
Depreciation and amortization |
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$ |
85,300 |
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$ |
67,874 |
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| Interest on lease liabilities |
Other expense, net |
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9,012 |
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11,575 |
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| Total finance lease costs |
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$ |
94,312 |
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$ |
79,449 |
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| Operating lease costs |
General and administrative expenses |
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$ |
4,590,571 |
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$ |
3,552,395 |
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| Total lease costs |
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$ |
4,684,883 |
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$ |
3,631,844 |
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Supplemental information and balance sheet location related to leases is as follows:
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Years Ended December 31, |
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2021 |
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2020 |
| Operating Leases: |
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| Operating lease right-of -use asset |
$ |
18,425,914 |
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$ |
11,581,435 |
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| Operating lease liability, current portion |
$ |
4,613,843 |
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$ |
2,918,140 |
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| Operating lease liability, net of current portion |
16,872,093 |
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10,632,672 |
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| Total operating lease liability |
$ |
21,485,936 |
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$ |
13,550,812 |
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| Finance Leases: |
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| Property and equipment, at cost |
$ |
267,252 |
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$ |
282,027 |
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| Less accumulated amortization |
(147,937) |
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(92,549) |
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| Property and equipment, net |
$ |
119,315 |
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$ |
189,478 |
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| Finance lease liability, current portion |
$ |
49,855 |
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$ |
70,507 |
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| Finance lease liability, net of current portion |
87,939 |
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132,469 |
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| Total finance lease liabilities |
$ |
137,794 |
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$ |
202,976 |
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| Weighted average remaining lease term (in years): |
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| Operating leases |
5.4 |
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4.7 |
| Finance lease |
3.6 |
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4.1 |
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| Weighted average discount rate: |
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| Operating leases |
4.6 |
% |
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8.5 |
% |
| Finance leases |
4.8 |
% |
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5.3 |
% |
Supplemental cash flow information related to leases is as follows:
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Years Ended December 31, |
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2021 |
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2020 |
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| Cash paid for amounts included in measurement of liabilities: |
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| Operating cash flows from operating leases |
$ |
4,484,737 |
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$ |
3,462,848 |
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| Operating cash flows from finance leases |
9,012 |
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11,575 |
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| Financing cash flows from finance leases |
80,322 |
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57,097 |
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| Non-cash transactions: ROU assets obtained in exchange for lease liabilities |
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| Operating lease |
10,007,188 |
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1,869,080 |
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| Finance lease |
15,140 |
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201,423 |
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Maturities of lease liabilities as of December 31, 2021 are as follows:
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Operating Leases |
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Finance Lease |
| 2022 |
$ |
5,461,181 |
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$ |
54,371 |
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| 2023 |
4,804,873 |
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27,600 |
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| 2024 |
4,289,146 |
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27,600 |
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| 2025 |
3,852,159 |
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27,600 |
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| 2026 |
2,002,135 |
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11,500 |
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| Thereafter |
3,657,317 |
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— |
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| Total lease payments |
24,066,811 |
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148,671 |
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| Less: Imputed interest |
(2,580,875) |
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(10,877) |
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| Total lease obligations |
21,485,936 |
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137,794 |
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| Less: Current obligations |
(4,613,843) |
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(49,855) |
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| Long-term lease obligation |
$ |
16,872,093 |
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$ |
87,939 |
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During the fourth quarter of 2021, the Company entered into various operating leases for its new corporate clinics' spaces that have not yet commenced. These leases are expected to result in additional ROU asset and liability of approximately $1.8 million. These leases are expected to commence during the first quarter of 2022, with lease terms of five to ten years.
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. In June 2021, the Company received a draft complaint from an employee, claiming that the Company had vicarious and other liability with respect to alleged wrongful acts committed by a former employee. In February 2022, the claim was settled for a total of $750,000. The settlement liability accrual of $750,000 is included in accrued expenses in its consolidated balance sheet as of December 31, 2021 and in general and administrative expenses in its consolidated income statement for the year ended December 31, 2021. The Company also recorded a $250,000 insurance recovery asset associated with the settlement. This insurance recovery was recognized as a reduction of general and administrative expenses in its consolidated income statement for the year ended December 31, 2021.
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