Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

4. Leases

We lease office space and office copiers related primarily to the administrative activities. The Company accounts for leases under ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases.

In January 2020, the Company signed a new four-year lease which covers approximately 2,771 square feet of office and storage space. This lease is effective March 1, 2020 and extends through February 29, 2024, with a right to extend the term for an additional five-year period, subject to the terms and conditions set forth in the lease agreement. The monthly rent is $13,855, subject to annual increases of 3.5 percent. In February 2020, the Company renewed its additional storage space lease, which requires us to make monthly payments of $1,370, subject to a 2.5 percent annual increase. The Company recorded a right of use asset and lease liability obligation of $715,310 upon inception of these leases. The Company also reclassified a previously existing right-of-use asset of $66,271 from other assets to right-of-use asset.

As of June 30, 2020, the balance of right-of-use assets was approximately $670,000, and the balance of total lease liabilities was approximately $682,000.

Future minimum lease payments under non-cancelable operating leases under ASC 842 as of June 30, 2020 are as follows:

	Operating Lease Payments
July 2020 – June 2021	$	196,156
July 2021 – June 2022		199,618
July 2022 – June 2023		197,600
July 2023 – June 2024		134,690
Total future minimum lease payments		728,064
Less: present value adjustment		46,280
Operating lease liabilities at June 30, 2020		681,784
Less: current portion of operating lease liabilities		174,772
Operating lease liabilities, net of current portion	$	507,012

The components of rent expense and supplemental cash flow information related to leases for the period are as follows:

	Period Ended June 30, 2020
Lease Cost
Operating lease cost (included in General and administrative expenses in the Company’s condensed Consolidated Statements of Operations)	$	80,443
Other information
Cash paid for amounts included in the measurement of lease liabilities for the period ended June 30, 2020	$	88,227
Weighted average remaining lease term – operating leases (in years)		3. 6
Average discount rate		3.6	%