Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

9. Leases

The Company leases certain assets under lease agreements. The lease liability consists of a single lease for office space which was classified as an operating lease. Upon adoption of Topic 842, on January 1, 2019 the Company recognized an addition to right-of-use assets of $60,309 and lease liabilities of $59,076. The difference between the recorded right-of-use assets and lease liabilities is mainly due to the reclassification of prepaid leasehold improvements incurred in lieu of twelve months rent which was included within the right-of-use asset recognized upon transition. As of March 31, 2019, the lease had remaining terms of 3 years and a weighted average remaining lease term of 3 years. Operating right-of-use assets and lease liabilities have been included within property and equipment and lease liabilities on the Company’s condensed consolidated balance sheet as follows:

Right-of-use asset	March 31, 2019
Lease asset	$	52,071
Leasehold improvements		38,138
Total right-of-use asset	$	90,209

Lease liability	March 31, 2019
Current portion	$	15,465
Long-term portion		35,958
Total lease liability	$	51,423

Operating lease liabilities are measured at the commencement date based on the present value of future lease payments. As the Company’s lease did not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The Company used a weighted average discount rate of 10% in determining its lease liabilities. The discount rate was derived from the Company’s assessment of current borrowings.

Operating lease right-of-use assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option.

Accretion on operating lease liabilities for the three months ended March 31, 2019 was $1,424. Principal payments against the operating lease liabilities for the three months ended March 31, 2019 was $5,264.

Future minimum lease payments to be paid by the Company as a lessee for operating leases as of March 31, 2019 for the next five years and thereafter are as follows:

2019	$	14,933
2020		19,911
2021		19,911
2022		4,978
2023		-
Thereafter		-
Total future minimum lease payments	$	59,733
Discount		(8,310	)
Total	$	51,423