14. LEASES

The Company adopted ASU 2016-02 – Leases (Topic 842) effective January 1, 2019 using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated. There was no net cumulative effect adjustment to retained earnings as of January 1, 2019 as a result of adoption. ASU 2018-11 – Leases (Topic 842) – Targeted Improvements permits an entity to apply the new leases standard at the date of adoption. Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with ASC 840 – Leases.

Operating Leases

The Company’s lease portfolio consists of office leases with lease terms ranging from less than one year to seven years, with the weighted average lease term being three years.

Certain leases provide for increases in future lease payments once the term of the lease has expired, as defined in the lease agreements. These leases generally also include real estate taxes.

Information as Lessee under ASC 842

The Company reassessed all of our leases to determine whether any expired or existing contracts were or contained a lease under ASC 842. Expired or existing contracts previously considered leases under ASC 840 no longer meet the definition of a lease under ASC 842 and therefore, have been excluded from future lease payments.

The Company still maintains these agreements, along with other short-term leases that are not capitalized, and the expenses are recognized in the period incurred.

As of December 31, 2019, maturities of the operating lease liabilities by fiscal year were as follows:



Year ending December 31,
2020	$	474,579
2021		377,930
2022		318,326
2023		182,269
2024		5,388
Thereafter		6,286
Total lease payments	$	1,364,778
Less: interest		(100,309)
Total operating lease liabilities	$	1,264,469

Included below is other information regarding leases for the year ended December 31, 2019.


	Year Ended
	December 31, 2019
Other information
Operating lease expense	$	249,208
Short-term lease expense	$	26,852
Cash paid for operating leases	$	249,462
Weighted-average remaining lease term (years)– operating leases (1)		3
Weighted-average discount rate – operating leases		4.85%

(1)

The Company’s lease terms include options to extend the lease when it is reasonably certain the Company will exercise its option. Additionally, the Company considered any historical and economic factors in determining if a lease renewal or termination option would be exercised.

Rent expense is recorded in General and Administrative expense in the consolidated statements of operations.

Information as Lessee under ASC 840 -2018

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018, future minimum lease payments under ASC 840 for operating leases were as follows:


Year ending December 31,
2019	$	451,710
2020		420,518
2021		237,142
2022		42,532
2023 and thereafter		4,134
Total	$	1,156,036