Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

3. Leases

Accounting and reporting guidance for leases requires that leases be evaluated and classified as either operating or finance leases by the lessee and as either operating, sales-type or direct financing leases by the lessor. For leases with terms greater than 12 months, the Company records the related right-of-use (“ROU”) asset and lease obligation at the present value of lease payments over the term. Leases may include fixed rental escalation clauses, renewal options and / or termination options that are factored into the determination of lease payments when appropriate. The Company’s operating leases are included in ROU assets, lease liabilities-current portion and lease liability-less current portion in the accompanying consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. The Company’s leases do not usually provide a readily determinable implicit rate; therefore, an estimate of the Company’s incremental borrowing rate is used to discount the lease payments based on information available at the lease commencement date. The discount rate used was 5.5%.

The table below summarizes the right-of-use asset and lease liability for the period ended December 31, 2020:

	December 31, 2020
Right of Use Assets
Balance at December 31, 2019	$	789,205
Addition		260,661
Termination		(234,980	)
Depreciation		(331,773	)
Balance at December 31, 2020	$	483,113
Lease Liability
Balance at December 31, 2019	$	789,205
Addition		260,661
Termination		(234,980	)
Lease interest expense		53,768
Payments		(385,541	)
Balance at December 31, 2020	$	483,113
Short-term portion	$	287,900
Long-term portion		195,213
Total	$	483,113

Undiscounted rent payments for the next five years are as follows:

2021	$	334,620
2022		78,240
2023		77,100
2024		70,440
2025		71,940
Total	$	632,340
Impact of discounting		149,227
Lease liability, December 31, 2020	$	483,113