11. Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

11. Leases

Leases with an initial term of one year or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Leases with a term greater than one year are recognized on the balance sheet at the time of lease commencement or modification by recording an ROU operating lease asset and a lease liability, initially measured at the present value of the lease payments. Lease costs are recognized in the income statement over the lease term on a straight-line basis. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

The Company's leases consist of real estate leases for office, retail and warehouse spaces. The Company elected to combine the lease and related non-lease components for its operating leases.

The Company’s operating leases may include options to extend or terminate the leases, which are not included in the determination of the ROU asset or lease liability unless it is reasonably certain to be exercised. The Company's operating leases have remaining lease terms of less than one year. The Company’s lease agreements do not contain any material residual value guarantees or materially restrictive covenants.

As the Company's leases do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The discount rate used in the computations was 6%.

Balance Sheet Classification of Operating Lease Assets and Liabilities

	Balance Sheet Line	December 31, 2019
Asset
Operating lease asset	Non-Current Assets	$	59,943
Liabilities
Operating lease liability	Non-Current Liabilities	$	66,803

Lease Costs

The table below summarizes the components of lease costs for the year ended December 31, 2019.

	Year Ended December 31, 2019
Operating lease costs	$	227,115

Maturities of Lease Liabilities

Maturities of lease liabilities as of December 31, 2019 are as follows:

2020 fiscal year	$	67,904
Total lease payments		67,904
Less: Interest		(1,101	)
Present value of lease liabilities	$	66,803

The following table presents the Company’s future minimum lease obligation under ASC 840 as of December 31, 2019:

2020 fiscal year $ 67,904