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Leases

6 Months Ended

Jun. 30, 2020

12.

Leases

On June 7, 2016, the Company entered into a lease agreement with Jericho Executive Center LLC for office space at 30 Jericho Executive Plaza in Jericho, New York which commenced on September 1, 2016 and runs through November 30, 2021. The Company’s monthly office rent payments under the lease are currently approximately $5,900 per month.

On May 1, 2019, the Company entered into a sublease agreement with Telecom Infrastructure Corp. (“Telecom”) for office space located at 122 East 42nd Street in New York, NY, pursuant to which Telecom was required to pay the Company $11,164 per month. The term of the sublease ran until April 26, 2023. On June 18, 2020, the Company entered into an agreement to terminate the sublease for this office space. Pursuant to the terms of the agreement, Telecom vacated the offices on June 30, 2020.

Lease Cancellation

On May 1, 2019, the Company entered into a lease agreement for office space located at 122 East 42nd Street in New York, NY and paid a $133,968 security deposit in the form of a letter of credit. The term of the lease ran until April 26, 2023. The Company’s monthly office rent payments under the lease were approximately $33,492 per month. On June 22, 2020, the Company entered into an agreement to terminate the lease for this office space. Pursuant to the terms of the agreement, the Company vacated the offices on June 30, 2020 and the Company agreed to forfeit its security deposit of $133,968.

In accordance with ASC 842-20-40-1, the Company accounted for the cancellation of the lease by removing the right-of-use asset and the lease liability, with a profit recognized for the difference. The Company recorded a net gain on the office lease cancellation of $141,001 reflected in the condensed consolidated statements of income.

As of June 30, 2020, the Company had no long-term leases that were classified as a financing lease. As of June 30, 2020, the Company did not have additional operating and financing leases that have not yet commenced.

At June 30, 2020, the Company had operating lease liabilities of approximately $0.1 million and right of use assets of approximately $0.1 million, which are included in the condensed consolidated balance sheet.

Total rent expense for the six months ended June 30, 2020 was $160,700, of which $36,095 was sublease income, and $178,305 for the six months ended June 30, 2019. Rent expense is recorded in general and administrative expense on the condensed consolidated statements of income.

The following table summarizes the Company’s operating leases:

	Six Months Ended
	June 30,
	2020			2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	76,828		$	48,692
Weighted average assumptions:
Remaining lease term		1.4			2.1
Discount rate		3.5	%		3.6	%

On June 30, 2020, future minimum payments under non-cancelable operating leases were as follows:

For the years ending December 31,	Amount
2020	$	45,203
2021		84,370
Total	$	129,573
Less: present value adjustment		(33,351	)
Present value of minimum lease payments	$	96,222