(9) Operating Lease Obligations

The Company adopted ASC 842 prospectively using the modified-retrospective method and elected the package of transition practical expedients that does not require reassessment of: (1) whether any existing or expired contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, the Company has elected other available practical expedients to not separate lease and nonlease components, which consist principally of common area maintenance charges, and to exclude leases with an initial term of 12 months or less.

The Company leases its headquarters where it occupies 10,877 square feet of office space. On November 11, 2019, the Company extended its original five-year lease for one additional year until May 31, 2021. The Company’s lease contains variable lease costs that do not depend on a rate or index and consist primarily of common area maintenance, taxes, and insurance charges. As the implicit rate was not readily determinable for the Company’s lease, the Company used an estimated incremental borrowing rate, or discount rate, to determine the initial present value of the lease payments. The discount rate for the lease was calculated using a synthetic credit rating model.

As of January 1, 2019, the Company recognized a lease liability of $325,683 and a right-of-use asset of $312,859, which was recorded net of a pre-existing deferred rent liability of $12,824. As of November 11, 2019, the effective date of the lease modification, the Company remeasured the lease liability for the remaining portion of the lease and adjusted the lease liability to $392,822 and right-of-use assets to $386,609, which was recorded net of a deferred rent liability of $6,213. As of December 31, 2019, the Company’s right-of-use asset, net of amortization, was $345,849.

Other operating lease information as of December 31, 2019:


Weighted-average remaining lease term - operating leases	1.4	years
Weighted-average discount rate - operating leases	6.6	%

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of December 31, 2019:


Year ended:
December 31, 2020	$	259,864
December 31, 2021		111,506
Total minimum lease payments		371,370
Less: imputed lease interest		(18,004)
Total lease liabilities	$	353,366

Lease expense for the year ended December 31, 2019 was comprised of the following:


Operating lease expense	$	241,443
Variable lease expense		58,697
Total lease expense	$	300,140

Cash payments related to operating leases for the year ended December 31, 2019 were $246,750.