Annual report pursuant to Section 13 and 15(d)

Commitments and Contingencies

v3.23.3
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
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, 2022 and December 31, 2021:
Years Ended December 31,
Line Item in the Company’s Consolidated Income Statements 2022 2021
Finance lease costs:
Amortization of assets Depreciation and amortization $ 55,572  $ 85,300 
Interest on lease liabilities Other expense, net 4,516  9,012 
Total finance lease costs $ 60,088  $ 94,312 
Operating lease costs General and administrative expenses $ 5,647,185  $ 4,590,571 
Total lease costs $ 5,707,273  $ 4,684,883 

Supplemental information and balance sheet location related to leases for the years ended December 31, 2022 and December 31, 2021 was as follows:
Years Ended December 31,
2022 2021
Operating Leases:
Operating lease right-of -use asset $ 20,587,199  $ 18,425,914 
Operating lease liability, current portion $ 5,295,830  $ 4,613,843 
Operating lease liability, net of current portion 18,672,719  16,872,093 
Total operating lease liability $ 23,968,549  $ 21,485,936 
Finance Leases:
Property and equipment, at cost $ 151,396  $ 267,252 
Less accumulated amortization (87,652) (147,937)
Property and equipment, net $ 63,744  $ 119,315 
Finance lease liability, current portion $ 24,433  $ 49,855 
Finance lease liability, net of current portion 63,507  87,939 
Total finance lease liabilities $ 87,940  $ 137,794 
Weighted average remaining lease term (in years):
Operating leases 5.4 5.4
Finance lease 3.4 3.6
Weighted average discount rate:
Operating leases 4.8  % 4.6  %
Finance leases 4.3  % 4.8  %
Supplemental cash flow information related to leases for the years ended December 31, 2022 and December 31, 2021 were as follows:
Years Ended December 31,
2022 2021
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases $ 5,931,114  $ 4,484,737 
Operating cash flows from finance leases 4,516  9,012 
Financing cash flows from finance leases 49,855  80,322 
Non-cash transactions: ROU assets obtained in exchange for lease liabilities
Operating lease 7,222,822  10,007,188 
Finance lease —  15,140 
Maturities of lease liabilities as of December 31, 2022 were as follows:
Operating Leases Finance Lease
2023 $ 6,280,108  $ 27,600 
2024 5,689,672  27,600 
2025 5,084,585  27,600 
2026 3,264,579  11,500 
2027 2,268,960  — 
Thereafter 4,561,694  — 
Total lease payments 27,149,598  94,300 
Less: Imputed interest (3,181,049) (6,360)
Total lease obligations 23,968,549  87,940 
Less: Current obligations (5,295,830) (24,433)
Long-term lease obligation $ 18,672,719  $ 63,507 
The Company entered into various operating leases for its new corporate clinics’ spaces that had not yet commenced as of the year ended December 31, 2022. These leases are expected to result in additional ROU asset and liability of approximately $1.5 million. These leases are expected to commence during the first and second quarter of 2023, with lease terms of five to ten years.
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 the year ended December 31, 2022, the undiscounted remaining lease payments under the agreement totaled $234,696. The Company had not recorded a liability with respect to the guarantee obligation as of December 31, 2022, 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.