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20. Commitment and Contingencies | 3 Months Ended
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Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract] |
Commitment and Contingencies | Note 20: Commitment and Contingencies In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases.” The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. For practically all leases, a lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2018. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842), Targeted Improvements, which allows for an additional optional transition method where comparative periods presented in the financial statements in the period of adoption will not be restated and instead those periods will be presented under existing guidance in accordance with ASC 840, Leases. Management will use this optional transition method. As of January 1, 2019, management recorded lease liability of $2,071,903, right-of-use asset of $2,153,747, accumulated amortization of $124,070, a reversal of previously recorded deferred rent of $37,920 and the increase in accumulated deficit of $4,306. As of March 31, 2021, weighted-average lease term for operating leases equals to 74.70 months. Weighted-average discount rate equals to 9.86%. On February 6, 2018, the Company entered into an operating lease for 6,969 square feet of general office space at 131 South Rodeo Drive, Suite 250, Beverly Hills, CA 90212 pursuant to a 91-month lease that commenced on May 25, 2018. We pay rent of $364,130 annually, subject to annual escalations of 3.5%. Effective January 21, 2019, the Company entered into a sublease for the 6,969 square feet of general office space located at 131 South Rodeo Drive, Suite 250, Beverly Hills, CA 90212 pursuant to an 83-month sublease that commenced on February 4, 2019. The subtenant will pay us rent of $422,321 annually, subject to annual escalations of 3.5%. On January 30, 2019, we entered into an operating lease for 5,838 square feet of general office space at 190 N. Canon Drive, Suite 400, Beverly Hills, CA 90210 pursuant to a 96-month lease that commenced on August 1, 2019. We will pay rent of $392,316 annually, subject to annual escalations of 3.5%. On February 1, 2021, as part of the Acquisition, the Company assumed an operating lease that entered into on May 19, 2019 for 6845 square feet of general office space located at 245 Fairview Mall Drive, Suites 202 and 301, Toronto, Ontario M2J 4T1 pursuant to a 84 month lease which commenced on October 1, 2019. We pay rent of $95,830 annually, subject to annual escalations 5% to 7%. On February 1, 2021, as part of the Acquisition, the Company assumed an operating lease that entered into on April 30, 2019 for 3,379 square feet of general office space located at One International Boulevard, 11th Floor, Mahawh, New Jersey pursuant to a 24 month lease which commenced on May 1, 2019. We pay rent of $74,338 annually. On March 2, 2021, the Company entered into an operating lease for 4,765 square feet of general office space located at 1050 Wall Street West, Suite 665, Lyndhurst NJ, 07071 pursuant to a 89 month lease which is expected to commence on August 1, 2021. We will pay $114,360 annually subject to annual escalations of 2.5%. In addition, the Company has contractual commitments for employment agreements of certain employees. Rental expenses incurred for operating leases during the three months ended March 31, 2021 and March 31, 2020 were $112,343 and $207,839, respectively. During the three months ended March 31, 2021 and March 31, 2020, we received sub-lease income of $0 and $121,070, respectively. The following is a schedule of future minimum contractual obligations as of March 31, 2021, under the Company’s operating leases and employment agreements:
| 2021 |  | 2022 |  | 2023 |  | 2024 |  | 2025 |  | Thereafter |  | Total |
Operating Leases | $ | 368,440 |  | $ | 571,782 |  | $ | 555,038 |  | $ | 577,065 |  | $ | 595,729 |  | $ | 895,930 |  | $ | 3,563,984 |
Employment Contracts |  | 1,688,131 |  |  | 1,915,183 |  |  | 1,554,107 |  |  | 1,105,566 |  |  | 506,583 |  |  | – |  |  | 6,769,570 |
Consulting Contracts |  | 300,000 |  |  | 187,500 |  |  | – |  |  | – |  |  | – |  |  | – |  |  | 487,500 |
| $ | 2,356,571 |  | $ | 2,674,465 |  | $ | 2,109,145 |  | $ | 1,682,631 |  | $ | 1,102,312 |  | $ | 895,930 |  | $ | 10,821,054 |

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