Quarterly report pursuant to Section 13 or 15(d)

Other Commitments and Contingencies

v3.23.1
Other Commitments and Contingencies
3 Months Ended
Mar. 31, 2023
Other Commitments and Contingencies  
Other Commitments and Contingencies

Note 13. Other Commitments and Contingencies

 

Office lease – Petrodome

 

In April 2018, the Company’s subsidiary, Petrodome entered into a 66-month lease for 4,147 square feet of office space for its corporate office in Houston, Texas. The annual base rent commenced at $22.00 per square foot and escalates at $0.50 per foot each year through expiration of the lease term. Operating lease expense is recognized on a straight-line basis over the lease term. Operating lease expense was $24,096 for the three months ended March 31, 2023 and 2022, respectively.

Building, vehicle and equipment leases – Simson-Maxwell

 

The Company has right-of-use assets and operating lease liabilities associated with various operating lease agreements of Simson-Maxwell pertaining to seven business locations, for the premises, vehicles and equipment used in operations in the amount of $5,845,810. These values were determined using a present value discount rate of 3.45% for the premises, and 7.5% for vehicles and equipment. The leases have varying terms, payment schedules and maturities. Operating lease expense is recognized on a straight-line base over each of the lease terms.

 

Payments due in each of the next five years and thereafter at March 31, 2023 under these leases are as follows:

 

 

 

 Building

 

 

 Vehicle and Equipment

 

 

 

 

 

 Leases

 

 

 Leases

 

 

 Totals

 

 

 

 

 

 

 

 

 

 

 

2024

 

$ 1,090,810

 

 

$ 297,453

 

 

$ 1,388,263

 

2025

 

 

844,894

 

 

 

91,043

 

 

 

935,937

 

2026

 

 

580,482

 

 

 

7,574

 

 

 

588,056

 

2027

 

 

408,723

 

 

 

2,693

 

 

 

411,416

 

2028 and thereafter

 

 

1,194,181

 

 

 

-

 

 

 

1,194,181

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ 4,119,090

 

 

$ 398,763

 

 

$ 4,517,853

 

Less imputed interest

 

 

 

 

 

 

 

 

 

 

(395,968 )

Present value of remaining lease payments

 

 

 

 

 

 

 

 

 

$ 4,121,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

 

 

 

 

$ 1,255,745

 

Non-current

 

 

 

 

 

 

 

 

 

$ 2,866,140

 

 

Operating lease expense for these leases was $322,387 and $368,740 for the three months ended March 31, 2023 and 2022, respectively.

 

Legal matters

 

From time to time the Company may be a party to litigation involving commercial claims against the Company. Management believes that the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position or results of operations.