Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

LEASES

11. LEASES

Operating Leases

The Company has operating leases for office, manufacturing, and warehouse space. Amounts recognized as of June 30, 2020 and December 31, 2019 for operating leases were as follows:

(Amounts in US$'s)	June 30, 2020		December 31, 2019
ROU assets	$	2,878,467	$	2,199,682
Lease liability	$	2,971,673	$	2,212,548

During the quarter ended March 31, 2020, the Company recognized three months of rent abatement for its executive office located at 5000 Quorum Drive, Dallas, TX 75254, resulting in a reduction of the right-of-use asset and lease liability by $101,438.

As part of the Acquired Business transaction on March 6, 2020, the Company assumed a lease for 23,300 square feet of flexible office space with a remaining term of approximately 62 months that will expire on May 30, 2025. A right-of-use asset and lease liability for $1,048,058 was recorded on March 6, 2020. Monthly payments will range from $17,600 to $20,903 during the life of the lease. The lease did not include an implicit rate of return; therefore, the Company used an incremental borrowing rate based on other leases with similar terms. The lease agreement has no renewal option.

Other information related to the Company's operating leases are as follows:

(Amounts in US$'s)	For the six months ended June 30, 2020
ROU Asset – December 31, 2019	$	2,199,682
Increase		1,048,058
Decrease		(101,438	)
Amortization		(267,835	)
ROU Asset – June 30, 2020	$	2,878,467
Lease liability – December 31, 2019	$	2,212,548
Increase		1,048,058
Decrease		(101,438	)
Amortization		(187,495	)
Lease liability – June 30, 2020	$	2,971,673
Lease liability – short term	$	586,048
Lease liability – long term		2,385,625
Lease liability – total	$	2,971,673

The following table presents the weighted-average remaining lease term and weighted average discount rates related to the Company's operating leases as of June 30, 2020 and December 31, 2019, respectively:

(Amounts in US$'s)	June 30, 2020			December 31, 2019
Weighted average remaining lease term		4.72 years			4.56 years
Weighted average discount rate		6.01	%		6.50	%

The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Condensed Consolidated Balance Sheet as of June 30, 2020:

(Amounts in US$'s)	Operating Leases
Remainder of 2020	$	323,725
2021		740,907
2022		660,091
2023		671,761
2024		635,306
Thereafter		371,116
Total minimum lease payments		3,402,906
Less: effect of discounting		(431,233	)
Present value of future minimum lease payments		2,971,673
Less: current obligations under leases		(586,048	)
Long-term lease obligations	$	2,385,625

Finance Leases

As part of the Acquired Business transaction on March 6, 2020, the Company assumed a finance lease for certain equipment with a remaining term of approximately 20 months. The finance lease includes a bargain purchase option of $1 for the equipment at the end of the term on October 1, 2021. A right-of-use asset and lease liability for $18,009 was recorded on March 6, 2020. Monthly payments are $964.76 during the life of the lease, excluding the bargain purchase option. The lease did not include an implicit rate of return; therefore, the Company used an incremental borrowing rate.

On June 11, 2020, the Company entered into a 24-month finance lease for certain equipment. The finance lease includes a bargain purchase option of $1 for the equipment at the end of the term on June 11, 2022. A right-of-use asset and lease liability for $35,562 was recorded on June 11, 2020. Monthly payments are $1,481.69 during the life of the lease, excluding the bargain purchase option. The lease included an implicit rate of return.

Other information related to the Company's finance leases are as follows:

(Amounts in US$'s)	For the six months ended June 30, 2020
ROU Asset – December 31, 2019	$	—
Increase		53,571
Decrease		—
Amortization		(2,989	)
ROU Asset – June 30, 2020	$	50,582
Lease liability – December 31, 2019	$	—
Increase		53,571
Decrease		—
Interest accretion		446
Payment		(3,859	)
Lease liability – June 30, 2020	$	50,158
Lease liability – short term	$	28,580
Lease liability – long term		21,578
Lease liability – total	$	50,158

The following table presents the weighted-average remaining lease term and weighted average discount rates related to the Company's finance leases as of June 30, 2020 and December 31, 2019, respectively:

(Amounts in US$'s)	June 30, 2020			December 31, 2019
Weighted average remaining lease term		1.81 years			4.56 years
Weighted average discount rate		2.42	%		6.50	%