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LEASES

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

NOTE 13 - LEASES

The Company has various lease agreements with terms up to 10 years, comprising of leases of office space. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

The assets and liabilities from operating and finance leases are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, we use a discount rate based on our incremental borrowing rate, which is determined using the interest rate of our long-term debt as of January 1, 2019.

The Company’s weighted-average remaining lease term relating to its operating leases is 6.05 years, with a weighted-average discount rate of 6.74%.

The Company incurred lease expense for its operating leases of $52,508 which was included in “General and administrative expenses,” for the quarter ended March 31, 2019.

The Company had operating cash flows used in operating leases of $37,096 for the quarter ended March 31, 2019. Right-of-use assets obtained in exchange for new operating lease liabilities $622,765 for the quarter ended March 31, 2019.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of March 31, 2019.

Maturity of Lease Liability
2019		$	172,893
2020			158,383
2021			73,858
2022			44,912
2023			44,912
Thereafter			179,648
Total undiscounted finance lease payments		$	674,607
Less: Imputed interest			118,558
Present value of finance lease liabilities		$	556,049

The Company’s weighted-average remaining lease term relating to its finance leases is 1.17 years, with a weighted-average discount rate of 6.00%.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s finance leases as of March 31, 2019.

Maturity of Lease Liability
2019		$	26,384
2020			14,658
2021			-
2022			-
2023			-
Thereafter			-
Total undiscounted finance lease payments		$	41,041
Less: Imputed interest			1,499
Present value of finance lease liabilities		$	39,543

The Company had operating cash flows used in finances leases of $601 for the quarter ended March 31, 2019. The Company had financing cash flows used in finances leases of $7,232 for the quarter ended March 31, 2019.

The Company incurred interest expense on its finance leases of $601 which was included in “Interest expense,” for the quarter ended March 31, 2019. The Company incurred amortization expense on its finance leases of $26,802 which was included in “Depreciation and amortization expense,” for the quarter ended March 31, 2019.