Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

LEASES

11. LEASES

Operating Leases

The Company has operating leases for office, manufacturing, and warehouse space. Amounts recognized as of March 31, 2020 and December 31, 2019 for operating leases were as follows:

(Amounts in US$'s)	March 31, 2020		December 31, 2019
ROU assets	$	3,056,102	$	2,199,682
Lease liability	$	3,070,254	$	2,212,548

During the quarter ended March 31, 2020, the Company recognized 3-months of rent abatement for its executive office located at 5000 Quorum Drive, Dallas, TX 75254, resulting in a reduction of the right-of-use asset and lease liability by $101,438.

As part of the Acquired Business transaction on March 6, 2020, the Company assumed a lease for 23,300 square feet of flexible office space with a remaining term of approximately 62 months that will expire on May 30, 2025. A right-of-use asset and lease liability for $1,048,058 was recorded on March 6, 2020. Monthly payments will range from $17,600 to $20,903 during the life of the lease. The lease did not include an implicit rate of return; therefore, the Company used an incremental borrowing rate based on other leases with similar terms. The lease agreement has no renewal option.

Other information related to the Company's operating leases are as follows:

(Amounts in US$'s)	March 31, 2020
ROU Asset – December 31, 2019	$	2,199,682
Increase		1,048,058
Decrease		(101,438	)
Amortization		(90,200	)
ROU Asset – March 31, 2020	$	3,056,102
Lease liability – December 31, 2019	$	2,212,548
Increase		1,048,058
Decrease		(101,438	)
Amortization		(88,914	)
Lease liability – March 31, 2020	$	3,070,254
Lease liability – short term	$	509,079
Lease liability – long term		2,561,175
Lease liability – total	$	3,070,254

The following table presents the weighted-average remaining lease term and weighted average discount rates related to the Company's operating leases as of March 31, 2020 and December 31, 2019, respectively:

(Amounts in US$'s)	March 31, 2020			December 31, 2019
Weighted average remaining lease term		4.89 years			4.56 years
Weighted average discount rate		6.07	%		6.50	%

The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Consolidated Balance Sheet as of March 31, 2020:

(Amounts in US$'s)	Operating Leases
Remainder of 2020	$	471,035
2021		741,696
2022		660,091
2023		671,761
2024		635,306
Thereafter		371,116
Total minimum lease payments		3,551,005
Less: effect of discounting		(480,751	)
Present value of future minimum lease payments		3,070,254
Less: current obligations under leases		(509,079	)
Long-term lease obligations	$	2,561,175

Finance Leases

As part of the Acquired Business transaction on March 6, 2020, the Company assumed a finance lease for certain equipment with a remaining term of approximately 20 months. The finance lease includes a bargain purchase option of $1 for the equipment at the end of the term on October 1, 2021. A right-of-use asset and lease liability for $18,009 was recorded on March 6, 2020. Monthly payments are $964.76 during the life of the lease, excluding the bargain purchase option. The lease did not include an implicit rate of return; therefore, the Company used an incremental borrowing rate.

Other information related to the Company's finance leases are as follows:

(Amounts in US$'s)	March 31, 2020
ROU Asset – December 31, 2019	$	—
Increase		18,009
Decrease		—
Amortization		(500	)
ROU Asset – March 31, 2020	$	17,509
Lease liability – December 31, 2019	$	—
Increase		18,009
Decrease		—
Interest accretion		120
Principle payment		(965	)
Lease liability – March 31, 2020	$	17,164
Lease liability – short term	$	10,586
Lease liability – long term		6,578
Lease liability – total	$	17,164

The following table presents the weighted-average remaining lease term and weighted average discount rates related to the Company's finance leases as of March 31, 2020 and December 31, 2019, respectively:

(Amounts in US$'s)	March 31, 2020			December 31, 2019
Weighted average remaining lease term		1.58 years			—
Weighted average discount rate		8	%		—