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Leases | 6 Months Ended
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Jun. 30, 2019
Lessee Disclosure [Abstract] |
Leases | Note 11 – Leases We adopted ASU 2016-02: Leases (Topic 842) as of January 1, 2019. We determine if an arrangement is a lease at inception. Operating leases are included in the right-of-use (ROU) assets, current operating lease liabilities and noncurrent operating lease liabilities in our consolidated balance sheet. Finance leases are included in property and equipment, current finance lease obligations and long-term finance lease obligations in our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. As the discount rates in the Company’s lease are not implicit, the Company estimated the incremental borrowing rate based on the rate of interest the Company would have to pay to borrow a similar amount on a collateralized basis over a similar term. Our lease term includes options to extend the lease when it is reasonably certain that we will exercise that option. Leases with a term of 12 months or less are not recorded on the balance sheet. Our lease agreements do not contain any residual value guarantees. We have operating and finance leases for corporate offices, other regional offices, and certain equipment. Our leases have remaining lease terms of 1 year to 15 years, some of which include multiple options to extend the leases for up to 5 years each. The components of lease expense were as follows:
|  | Three months ended |  |  | Six months ended |
|  | June 30, 2019 |  |  | June 30, 2019 |
Operating lease cost |  | $ | 117,842 |  |  | $ | 237,539 |
Finance lease cost |  |  |  |  |  |  |  |
Amortization of assets |  |  | 2,266 |  |  |  | 4,533 |
Interest on finance lease obligations |  |  | 1,954 |  |  |  | 3,960 |
Total net lease cost |  | $ | 122,062 |  |  | $ | 246,032 |
Included in the table above, is $106,600 and $198,800 for the three and six months ended June 30, 2019, respectively, of operating lease cost for our corporate headquarters. This space is being leased from The Move, LLC. Our CEO and President, each a related party to WFCF, have a 24.3% jointly-held ownership interest in The Move, LLC. Rent expense for the three and six months ended June 30, 2018 was $154,900 and $281,100, respectively. Supplemental balance sheet information related to leases was as follows:
|  | June 30, 2019 |
Operating leases: |  |  | Related Party |  |  |  | Other |  |  |  | Total |
Right of use asset |  | $ | 3,017,704 |  |  | $ | 274,607 |  |  | $ | 3,292,311 |
Current operating lease liabilities |  |  | 148,698 |  |  |  | 59,614 |  |  |  | 208,312 |
Noncurrent operating lease liabilities |  |  | 3,341,434 |  |  |  | 253,135 |  |  |  | 3,594,569 |
Total operating lease liabilities |  | $ | 3,490,132 |  |  | $ | 312,749 |  |  | $ | 3,802,881 |
Finance leases: |  | June 30, 2019 |  |
Right of use asset, at cost |  | $ | 47,367 |  |
Accumulated amortization |  |  | (18,061 | ) |
Right of use asset, net |  | $ | 29,306 |  |
Current obligations of finance leases |  | $ | 8,044 |  |
Finance leases, net of current obligations |  |  | 29,671 |  |
Total finance lease liabilities |  | $ | 37,715 |  |
Weighted average remaining lease term (in years): |  |  |  |  |
Operating leases |  |  | 11.5 |  |
Finance leases |  |  | 3.4 |  |
Weighted average discount rate: |  |  |  |  |
Operating leases |  |  | 5.8 | % |
Finance leases |  |  | 21.0 | % |
Supplemental cash flow and other information related to leases was as follows:
|  | Six months ended |  |
|  | June 30, 2019 |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |
Operating cash flows from operating leases |  | $ | 210,645 |  |
Operating cash flows from finance leases |  | $ | 3,960 |  |
Financing cash flows from finance leases |  | $ | 2,968 |  |
Maturities of lease liabilities were as follows:
Years Ending December 31st, |  | Operating Leases |  |  | Finance Leases |
2019 (remaining six months) |  | $ | 211,351 |  |  | $ | 7,350 |
2020 |  |  | 422,164 |  |  |  | 15,705 |
2021 |  |  | 434,829 |  |  |  | 14,143 |
2022 |  |  | 447,874 |  |  |  | 10,984 |
2023 |  |  | 461,310 |  |  |  | 5,610 |
Thereafter |  |  | 3,308,155 |  |  |  | — |
Total lease payments |  |  | 5,285,683 |  |  |  | 53,792 |
Less amount representing interest |  |  | (1,482,802 | ) |  |  | (16,077 | )
Total lease obligations |  |  | 3,802,881 |  |  |  | 37,715 |
Less current portion |  |  | (208,312 | ) |  |  | (8,044 | )
Long-term lease obligations |  | $ | 3,594,569 |  |  | $ | 29,671 |
As previously reported in the 2018 Form 10-K under ASC Topic 840, future minimum lease payments under the Company’s operating lease agreements that had initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2018 were as follows:
Years ended December 31st: |  | Total |
2019 |  | $ | 420,370 |
2020 |  |  | 421,590 |
2021 |  |  | 432,079 |
2022 |  |  | 447,264 |
2023 |  |  | 460,682 |
Thereafter |  |  | 3,327,705 |
Total lease commitments |  | $ | 5,509,690 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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