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Leases
 6 Months Ended
Jun. 30, 2019
Leases [Abstract]  
Leases

Note 3 - Leases

 

The Company adopted ASC 842 as of January 1, 2019, using a modified retrospective approach and applying the standard’s transition provisions at January 1, 2019, the effective date. The Company made an accounting policy election to exclude from balance sheet reporting those leases with initial terms of 12 months or less. At June 30, 2019, the Company has an operating lease for corporate office space and two finance leases for office equipment and furniture located at the corporate office space. In addition, the Company has auxiliary corporate office space that it rents on a month-to-month basis; this rental is accounted for as an operating lease with the same term as the Company’s main office in the same building. Upon adoption of ASC 842, the Company recognized $1.2 million of right-to-use assets as operating leases and $0.3 million of right-to-use assets as finance leases. The Company also recognized $0.2 million of long-term operating lease obligations, net of the current portion of $0.1 million and $0.9 million of long-term finance lease obligations, net of the current portion of $0.3 million.

 

The components of lease expense are as follows:

  

   Three months ended
June 30,
2019		  

Six months ended

June 30,
2019

 
Operating lease expense  $93,043   $186,088 
           
Finance lease cost          
Amortization of right-to-use assets  $20,323   $40,647 
Interest on lease liabilities  $5,576   $11,506 
Total finance lease cost  $25,899   $52,153 

 

Supplemental cash flow information related to leases are as follows:

 

   Three months ended
June 30,
2019		   Six months ended
June 30,
2019		 
Cash flow information:        
         
Cash paid for amounts included in the measurement of lease liabilities:        
Operating cash flows from operating leases  $85,869   $171,738 
Operating cash flows from finance leases  $5,576   $11,506 
Financing cash flows from finance leases  $17,989   $35,624 
           
Non-cash activity:          
           
Right-of-use assets obtained in exchange for lease obligations at June 30, 2019:          
Operating leases  $1,035,956      
Finance Leases  $261,721      

 

Weighted average remaining lease terms are as follows at June 30, 2019:

 

Weighted average remaining lease term:      
Operating leases     3.2 years  
Finance Leases     3.2 years  

 

As the Company’s leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at adoption date in determining the present value of lease payments. Below is information on the weighted average discount rates used:

 

Weighted average discount rates:    
Operating leases   8%
Finance Leases   8%

 

Maturities of lease liabilities are as follows:

  

Year ending December 31,  Operating Leases   Finance Leases 
2019 (excluding six months ended June 30, 2019)  $186,932   $47,130 
2020   375,352    94,260 
2021   377,715    94,260 
2022   252,907    64,144 
2023   -    3,912 
Total lease payments  $1,192,906   $303,706 
Less imputed interest   (142,600)   (36,962)
Present value of lease liabilities  $1,050,306   $266,744