Annual report pursuant to Section 13 and 15(d)

Commitments and Contingencies

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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2023
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, 2023 and December 31, 2022:
Years Ended December 31,
Line Item in the Company’s Consolidated Income Statements 2023 2022
Finance lease costs:
Amortization of assets Depreciation and amortization $ 30,279  $ 55,572 
Interest on lease liabilities Other expense, net 3,167  4,516 
Total finance lease costs $ 33,446  $ 60,088 
Operating lease costs General and administrative expenses $ 6,075,254  $ 5,647,185 
Total lease costs $ 6,108,700  $ 5,707,273 

Supplemental information and balance sheet location related to leases for the years ended December 31, 2023 and December 31, 2022 was as follows:
Years Ended December 31,
2023 2022
Operating Leases:
Operating lease right-of -use asset $ 12,413,221  $ 20,587,199 
Operating lease liability, current portion $ 3,756,328  $ 5,295,830 
Operating lease liability, net of current portion 10,914,997  18,672,719 
Total operating lease liability $ 14,671,325  $ 23,968,549 
Finance Leases:
Property and equipment, at cost $ 151,396  $ 151,396 
Less accumulated amortization (117,932) (87,652)
Property and equipment, net $ 33,464  $ 63,744 
Finance lease liability, current portion $ 25,491  $ 24,433 
Finance lease liability, net of current portion 38,016  63,507 
Total finance lease liabilities $ 63,507  $ 87,940 
Weighted average remaining lease term (in years):
Operating leases 4.8 5.4
Finance lease 2.4 3.4
Weighted average discount rate:
Operating leases 5.4  % 4.8  %
Finance leases 4.3  % 4.3  %
Supplemental cash flow information related to leases for the years ended December 31, 2023 and December 31, 2022 were as follows:
Years Ended December 31,
2023 2022
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases $ 6,567,992  $ 5,931,114 
Operating cash flows from finance leases 3,167  4,516 
Financing cash flows from finance leases 24,432  49,855 
Non-cash transactions: ROU assets obtained in exchange for lease liabilities
Operating lease 4,645,810  7,222,822 
Finance lease —  — 
Maturities of lease liabilities as of December 31, 2023 were as follows:
Operating Leases Finance Lease
2024 $ 4,424,754  $ 27,600 
2025 4,052,720  27,600 
2026 2,753,979  11,500 
2027 2,026,045  — 
2028 1,202,912  — 
Thereafter 2,233,735  — 
Total lease payments 16,694,145  66,700 
Less: Imputed interest (2,022,820) (3,193)
Total lease obligations 14,671,325  63,507 
Less: Current obligations (3,756,328) (25,491)
Long-term lease obligation $ 10,914,997  $ 38,016 
The Company entered into a lease for its new corporate clinic's space that had not yet commenced as of the year ended December 31, 2023. This lease is expected to result in additional ROU asset and liability of approximately $0.6 million. This lease is expected to commence during the first or second quarter of 2024, with lease terms 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, 2023, the undiscounted remaining lease payments under the agreement totaled $184,296. The Company had not recorded a liability with respect to the guarantee obligation as of December 31, 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, subject to policy limits.