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Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Lease Commitments

We determine whether an arrangement is a lease at inception and whether such leases are operating or financing leases. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. We use these options in determining our right-of-use assets and lease liabilities. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determine the present value of the lease payments.

Operating lease expense is recognized on a straight-line basis over the lease term. Total operating lease expenses for the three-months ended March 31, 2021 and 2020 was $533,370 and $527,044, respectively. The current portion of the Company's operating lease liabilities as of March 31, 2021 is $1,696,079 and is included in accounts payable and accrued liabilities. The long-term portion of the Company's operating lease liabilities as of March 31, 2021 is $3,978,158 and is included in other liabilities.

The weighted-average remaining lease term and discount rate for the Company's operating leases are as follows:

		March 31, 2021
Weighted-average remaining lease term		3.3 Years
Weighted-average discount rate			6.0%

Supplemental cash flow information related to operating leases for the three-months ended March 31, 2021 was as follows:

		March 31, 2021
Cash payments for operating leases		$	487,378

The following table summarizes the future minimum payments for operating leases at March 31, 2021 due in each year ending December 31,

2021		$	‌1,485,913
2022			‌1,970,141
2023			‌1,224,208
2024			‌855,309
2025			‌553,334
Thereafter			‌285,500
Total lease payments			‌6,374,405
Less imputed interest			‌(700,168	)
Present value of lease liabilities		$	5,674,237

Legal Matters

From time to time, the Company is involved in various claims and legal actions that arise in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, as of March 31, 2021 and December 31, 2020, the Company does not believe that the ultimate resolution of any legal actions, either individually or in the aggregate, will have a material adverse effect on its financial position, results of operations, liquidity, and capital resources.

Future litigation may be necessary to defend the Company by determining the scope, enforceability and validity of third-party proprietary rights or to establish its own proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.