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Operating Lease Liabilities
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
OPERATING LEASE LIABILITIES

Note 10. OPERATING LEASE LIABILITIES

 

The Company leases substantially all of its office space, technology equipment and office equipment used to conduct its business. The Company adopted ASC 842 effective January 1, 2019. For contracts entered into on or after the effective date, at the inception of a contract it assesses whether the contract is, or contains, a lease. The Company's assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether its obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. At inception of a lease, the Company allocates the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. Leases entered into prior to January 1, 2019, are accounted for under ASC 840 and were not reassessed.

 

The aggregate undiscounted cash flows of operating lease payments, with remaining terms greater than one year are as follows:

 

For the year ended  Amount 
December 31, 2021  $1,080,000 
December 31, 2022   1,007,000 
December 31, 2023   1,038,000 
December 31, 2024   1,070,000 
December 31, 2025   992,000 
Thereafter   730,000 
Total future minimum lease payments   5,917,000 
Less: discount   (1,289,000)
Total operating lease maturities   4,628,000 
Less: current portion of operating lease liabilities   (701,000)
Total long term portion of operating lease maturities  $3,927,000 

 

    December 31,     December 31,  
    2020     2019  
Weighted Average Remaining Lease Term - in years     5.53       6.32  
Weighted Average discount rate - %     8.89 %     9.50 %

 

As part of the effort to reduce costs, corporate executive offices were moved to an existing 5.4-acre corporate campus in Bay Shore, New York. The Company remains liable under the lease for the office in Hauppauge, New York which is now vacant. This lease has a term which ends January 2022. The annual rent was approximately $113,000 for the lease year which began in January 2019 and increases by approximately 3% per annum each year thereafter. Accordingly, the Company recognized an impairment of $275,000 to its Operating Lease Right-of-Use-Asset for the year ended December 31, 2019.

 

NTW's warehouse lease was terminated in May 2020 by its landlord under the terms of its lease agreement. Additionally, the Company entered into a new lease agreement for warehouse space in Bohemia, NY. The new lease term commenced on April 1, 2020 and expires on May 31, 2025. During the first year of the lease, the monthly rent is $10,964 and increases 3% each year thereafter. The final two months are equal installments of $1,746.

 

Rent expense for the years ended December 31, 2020 and 2019 was $1,173,000 and $1,193,000, respectively.