| Commitments and Contingencies |
Commitments and Contingencies Leases
The table below summarizes the components of lease expense and income statement location for the three and nine months ended September 30, 2021 and 2020:
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Line Item in the Company’s Condensed Consolidated Income Statements |
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Three Months Ended
September 30, 2021 |
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Three Months Ended September 30, 2020 |
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Nine Months Ended
September 30, 2021 |
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Nine Months Ended
September 30, 2020 |
| Finance lease costs: |
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| Amortization of assets |
Depreciation and amortization |
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$ |
21,797 |
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$ |
18,850 |
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$ |
63,506 |
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$ |
49,024 |
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| Interest on lease liabilities |
Other expense, net |
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2,132 |
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3,066 |
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7,225 |
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8,779 |
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| Total finance lease costs |
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23,929 |
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21,916 |
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70,731 |
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57,803 |
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| Operating lease costs |
General and administrative expenses |
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1,201,547 |
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891,603 |
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3,221,145 |
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2,659,569 |
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| Total lease costs |
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$ |
1,225,476 |
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$ |
913,519 |
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$ |
3,291,876 |
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$ |
2,717,372 |
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Supplemental information and balance sheet location related to leases is as follows:
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September 30, 2021 |
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December 31, 2020 |
| Operating Leases: |
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| Operating lease right-of -use asset |
$ |
15,903,649 |
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$ |
11,581,435 |
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| Operating lease liability - current portion |
$ |
3,874,451 |
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$ |
2,918,140 |
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| Operating lease liability - net of current portion |
14,977,426 |
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10,632,672 |
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| Total operating lease liability |
$ |
18,851,877 |
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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 |
(126,140) |
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(92,549) |
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| Property and equipment, net |
$ |
141,112 |
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$ |
189,478 |
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| Finance lease liability - current portion |
64,944 |
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70,507 |
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| Finance lease liability - net of current portion |
93,887 |
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132,469 |
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| Total finance lease liabilities |
$ |
158,831 |
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$ |
202,976 |
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| Weighted average remaining lease term (in years): |
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| Operating leases |
5.3 |
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4.7 |
| Finance lease |
3.6 |
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4.1 |
| Weighted average discount rate: |
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| Operating leases |
7.7 |
% |
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8.5 |
% |
| Finance leases |
5.1 |
% |
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5.3 |
% |
Supplemental cash flow information related to leases is as follows:
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Nine Months Ended
September 30, 2021 |
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Nine Months Ended
September 30, 2020 |
| Cash paid for amounts included in measurement of liabilities: |
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| Operating cash flows from operating leases |
$ |
3,069,797 |
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$ |
2,517,613 |
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| Operating cash flows from finance leases |
7,225 |
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8,779 |
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| Financing cash flows from finance leases |
59,285 |
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40,168 |
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| Non-cash transactions: ROU assets obtained in exchange for lease liabilities |
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| Operating lease |
$ |
6,232,875 |
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$ |
919,607 |
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| Finance lease |
15,140 |
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201,423 |
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Maturities of lease liabilities as of September 30, 2021 are as follows:
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Operating Leases |
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Finance Lease |
| 2021 (remainder) |
$ |
1,242,724 |
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$ |
22,824 |
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| 2022 |
5,149,264 |
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54,371 |
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| 2023 |
4,491,076 |
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27,600 |
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| 2024 |
3,915,068 |
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27,600 |
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| 2025 |
3,470,504 |
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27,600 |
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| Thereafter |
4,445,546 |
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11,500 |
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| Total lease payments |
$ |
22,714,182 |
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$ |
171,495 |
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| Less: Imputed interest |
(3,862,305) |
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(12,664) |
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| Total lease obligations |
18,851,877 |
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158,831 |
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| Less: Current obligations |
(3,874,451) |
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(64,944) |
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| Long-term lease obligation |
$ |
14,977,426 |
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$ |
93,887 |
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During the third quarter of 2021, the Company entered into various operating leases that have not yet commenced for spaces to be used by the Company’s new corporate clinics. These leases are expected to result in additional ROU assets and liabilities of approximately $1.4 million. These leases are expected to commence during the fourth quarter of 2021 and 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 from time to time. The Company maintains insurance to cover certain actions and believes that resolution of such litigation will not have a material adverse effect on the Company. Such matters are subject to many uncertainties and to outcomes of which the financial impacts are not predictable with assurance and that may not be known for extended periods of time. A liability is established once management determines a loss is probable and an amount that can be reasonably estimated.
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