Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

We have an operating lease for our corporate offices in Canada and finance leases for furniture and equipment. Our leases have remaining lease terms of twenty-one months to fifty months, and our primary operating leases include options to extend the leases for four years. Future renewal options that are not likely to be executed as of the balance sheet date are excluded from right-of-use assets and related lease liabilities.

We report operating leased assets, as well as operating lease current and noncurrent obligations on our balance sheets for the right to use the building in our business. Our finance leases represent furniture and office equipment; we report the furniture and equipment, as well as finance lease current and noncurrent obligations on our balance sheet.

Generally, interest rates are stated in our leases for equipment. When no interest rate is stated in a lease, however, we review the interest rates implicit in our recent finance leases to estimate our incremental borrowing rate. We determine the rate implicit in a lease by using the most recent finance lease rate, or other method we think most closely represents our incremental borrowing rate.

The components of lease expense were as follows

	Three Months Ended March 31, 2019
Operating lease cost	$	5,653
Finance lease cost:
Amortization of leased assets	$	2,583
Interest on lease liabilities		501
Total finance lease cost	$	3,084

Supplemental cash flow information related to leases was as follows:

	Three Months Ended March 31, 2019
Cash paid for amounts included in leases:
Operating cash flows from operating leases	$	(5,477	)
Operating cash flows from finance leases	$	501
Financing cash flows from finance leases	$	(2,121	)
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	-
Finance leases	$	-

Supplemental balance sheet information related to leases was as follows:

	March 31, 2019
Operating leases
Operating lease right-of-use assets	$	81,773
Current portion of operating lease obligations	$	15,665
Operating lease obligations, net of current portion		66,282
Total operating lease liabilities	$	81,947
Finance leases
Property and equipment, at cost	$	51,655
Accumulated depreciation		(28,410	)
Property and equipment, net	$	23,245
Current portion of finance lease obligations	$	9,776
Finance lease obligations, net of current portion		9,263
Total finance lease liabilities	$	19,039

	Three Months Ended March 31, 2019
Weighted Average Remaining Lease Term
Operating lease	4.4 years
Finance leases	2.0 years
Weighted Average Discount Rate
Operating lease		9.0%
Finance leases		9.8%

Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019

A summary of future minimum payments under non-cancellable operating lease commitment as of March 31, 2019 is as follows:

Years ending December 31,	Total
2019 (remaining months)	$	16,759
2020		22,608
2021		22,608
2022		22,608
2023		15,072
Total lease liabilities	$	99,654
Less amount representing interest		(17,707	)
Total		81,947
Less current portion		(15,665	)
	$	66,282

The following is a schedule of minimum future rentals on the non-cancelable finance leases as of March 31, 2019

Year ending December 31,	Total
2019 (remaining months)	$	7,835
2020		10,444
2021		2,793
Total minimum payments required:		21,072
Less amount representing interest:		(2,033
Present value of net minimum lease payments:		19,039
Less current portion		(9,776
	$	9,263

Disclosures related to periods prior to adoption of ASC 842

Minimum future lease payments under lease obligations as of December 31, 2018 are as follows:

Year Ended December 31,	Capital		Operating
2019	$	10,222	$	29,779
2020		10,222	38,202
2021		2,736	38,202
2022		-	38,202
2023		-	25,477
Total future minimum lease payments		23,180	169,862
Less amount representing interest		(2,484)
Present value of net minimum lease payment		20,696
Less current portion		(8,580)
	$	12,116