Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

The Company entered into operating leases for corporate and operational facilities (“real estate leases”), computer hardware for datacenters and automobiles (collectively “all other leases”).

Real estate leases. Substantially all real estate leases have remaining terms of six (6) to nine (9) years, with additional five (5) year extensions available. All of these leases require a fixed lease payment that contains an annual lease payment escalation provision ranging from 3% to 4% per year. Certain leases contain early termination provisions that would require payment of unamortized tenant improvements, real estate broker commissions paid, and up to six (6) months of rent to compensate the landlord for early termination. The cost to exit a lease would be significant and potentially range $0.2 million to $0.8 million. The earliest any lease termination provisions could be exercised would be in 2023.

All other leases. Non-real estate operating leases have remaining terms of one (1) to two (2) years. All of these leases require a fixed lease payment over the entire lease term with no escalation provision. There are no early termination provisions under such arrangements.

The components of lease expense were as follows:

	YEAR ENDED
	DECEMBER 31,
	2019
Operating lease expense	$	212,221
Finance lease expense:
Amortization of right of use assets	$	568,688
Interest on finance lease liabilities		285,978
Total finance lease expense	$	854,666

Operating lease expense is included in general and administrative expenses in the consolidated statement of operations. Amortization of right of use assets is include in depreciation and amortization in the consolidated statement of operations.

Supplemental cash flow information related to leases was as follows:

Cash paid for amounts included in the measurement of lease liabilities:

	YEAR ENDED
	DECEMBER 31,
	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	212,221
Operating cash flows from finance leases		285,978
Financing cash flows from finance leases		473,278
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	-
Finance leases	$	471,919

Supplemental balance sheet information related to leases was as follows:

	DECEMBER 31,
	2019
Operating lease right of use assets, net	$	5,932,769
Current portion of operating lease liabilities		599,619
Operating lease liabilities, net of current portion		5,593,649
Weighted average remaining lease term
Operating leases		11.1
Finance leases		1.1
Weighted average discount rate
Operating leases		5	%
Finance leases		5	%

Maturities of lease liabilities as of December 31, 2019, were as follows:

	Operating Leases		Finance Leases
2020	$	774,339	$	121,071
2021		794,852		6,009
2022		815,985		-
2023		771,833		-
2024		791,357		-
Thereafter		4,074,464		-
Total undiscounted operating lease payments		8,022,830		127,080
Less: Imputed interest		1,950,778		5,864
Total finance lease liability	$	6,072,052	$	121,216

As of December 31, 2019, the Company has an additional lease for office space that had not yet commenced with estimated future minimum rental commitments of approximately $1.91 million. This lease is expected to commence in 2020 with a term of up to 8 years. These undiscounted amounts are not included in the table above.