NOTE 10 - OPERATING LEASES

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

(10) OPERATING LEASES

(10) OPERATING LEASES

a) Adoption of ASC Topic 842, Leases

On January 1, 2019, the Company adopted Topic 842 using the modified retrospective method applied to leases that were in place as of January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 840. The Company’s leases consist of operating leases that relate to real estate rental agreements. All of the value of the Company’s lease portfolio relates to real estate lease agreements that were entered into starting in May 2014.

b) Practical Expedients and Elections

The Company elected the package of practical expedients permitted under the transition guidance, which allowed us to carryforward our historical lease classification, our assessment on whether a contract is or contains a lease, and our initial direct costs for any leases that exist prior to adoption of the new standard. We also elected the short-term lease recognition exemption for all leases that qualify.

c) Discount Rate Applied to Property Operating Lease

To determine the present value of the minimum future lease payments for operating leases at January 1, 2019, the Company was required to estimate a rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount

d) Discount Rate Applied to Property Operating Lease, continued

equal to the lease payments in a similar economic environment (the “incremental borrowing rate” or “IBR”). The Company determined the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. For the reference rate, the Company used the interest rate average for its latest borrowings.

e) Right of Use Assets

Right of use assets are included in the consolidated Balance Sheet as follows:

f) Non-current assets

Right of use assets at June 30, 2020, net of amortization - $1,346,323.

g) Total operating lease cost

Individual components of the total lease cost incurred by the Company is as follows:

	Six Months Ended June 30, 2020	Six Months Ended June 30, 2019
Operating lease expense	$ 323,541	$ 271,902

Minimum rental payments under operating leases are recognized on a straight line basis over the term of the lease.

h) Maturity of operating leases

The amount of future minimum lease payments under operating leases at June 30, 2020 are as follows:

	Operating Lease
Undiscounted future minimum lease payments:
2020 (six months)	$ 217,354
2021	307,419
2022	241,002
2023	252,891
2024	256,264
Thereafter	540,490
Total	1,815,420
Amount representing imputed interest	(418,097)
Total operating lease liability	$ 1,397,323
Current portion of operating lease liability	$ 284,632
Operating lease liability, non-current	$ 1,112,691