LEASES

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

NOTE 13 - LEASES

The Company has various lease agreements with terms up to 10 years, comprising of leases of office space. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

The assets and liabilities from operating and finance leases are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, we use a discount rate based on our incremental borrowing rate, which is determined using the interest rate of our long-term debt as of January 1, 2019.

The Company’s weighted-average remaining lease term relating to its operating leases is 6.21 years, with a weighted-average discount rate of 6.74%.

The Company incurred lease expense for its operating leases of $105,629 which was included in “General and administrative expenses,” for the quarter ended June 30, 2019.

The Company had operating cash flows used in operating leases of $74,504 for the six months ended June 30, 2019. Right-of-use assets obtained in exchange for new operating lease liabilities $622,765 for the six months ended June 30, 2019.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of June 30, 2019.

Maturity of Lease Liability
2019	$	119,893
2020		159,180
2021		73,812
2022		45,496
2023		45,496
Thereafter		181,984
Total undiscounted finance lease payments	$	625,862
Less: Imputed interest		110,642
Present value of finance lease liabilities	$	515,220

The Company’s weighted-average remaining lease term relating to its finance leases is 0.92 years, with a weighted-average discount rate of 6.00%.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s finance leases as of June 30, 2019.

Maturity of Lease Liability
2019	$	17,818
2020		14,848
2021		-
2022		-
2023		-
Thereafter		-
Total undiscounted finance lease payments	$	32,666
Less: Imputed interest		959
Present value of finance lease liabilities	$	31,707

The Company had operating cash flows used in finances leases of $1,092 for the quarter ended June 30, 2019. The Company had financing cash flows used in finances leases of $14,573 for the quarter ended June 30, 2019.

The Company incurred interest expense on its finance leases of $1,092 which was included in “Interest expense,” for the quarter ended June 30, 2019. The Company incurred amortization expense on its finance leases of $53,915 which was included in “Depreciation and amortization expense,” for the quarter ended June 30, 2019.