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Lease Obligations

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

NOTE 9 – LEASE OBLIGATIONS

The Company has operating lease agreements for two office spaces both with remaining lease terms of 4 years. The Company also has another storage facility on a twelve-month lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for the lease and non-lease components of its leases as a single lease component. Rent expense is recognized on a straight-line basis over the lease term.

Operating lease right-of-use ("ROU") assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company's incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives.

The components of rent expense and supplemental cash flow information related to leases for the period are as follows:

	Six Months Ended June 30, 2019
Lease Cost
Operating lease cost (included in general and administration in the Company's unaudited condensed statement of operations)	$	370,427

Other Information
Cash paid for amounts included in the measurement of lease liabilities for the first quarter 2019	$	-
Weighted average remaining lease term – operating leases (in years)		4.2
Average discount rate – operating leases		3.75	%

The supplemental balance sheet information related to leases for the period is as follows:

	At June 30, 2019
Operating leases
Long-term right-of-use assets	$	2,490,784

Short-term operating lease liabilities	$	562,126
Long-term operating lease liabilities		1,975,459
Total operating lease liabilities	$	2,537,585

Maturities of the Company's lease liabilities are as follows (in thousands):

Year Ending	Operating Leases
2019 (remaining 6 months)	$	306,160
2020		692,977
2021		720,922
2022		746,752
2023		272,057
Total lease payments		2,738,868
Less: Imputed interest/present value discount		(201,283	)
Present value of lease liabilities	$	2,537,585

Rent expense for the six months ended June 30, 2019 and 2018 was $370,427 and $95,305, respectively.