Quarterly report pursuant to Section 13 or 15(d)


3 Months Ended
Mar. 31, 2019
Leases [Abstract]  

Note 3 - Leases


The Company adopted ASC 842 as of January 1, 2019, using a modified retrospective approach and applying the standard’s transition provisions at January 1, 2019, the effective date. The Company made an accounting policy election to exclude from balance sheet reporting those leases with initial terms of 12 months or less. At March 31, 2019, the Company has an operating lease for corporate office space and two finance leases for office equipment and furniture located at the corporate office space. In addition, the Company has auxiliary corporate office space that it rents on a month-to-month basis; this rental is accounted for as an operating lease with the same term as the Company’s main office in the same building. Upon adoption of ASC 842, the Company recognized $1.2 million of right-to-use assets as operating leases and $0.3 million of right-to-use assets as finance leases. The Company also recognized $0.2 million of long-term operating lease obligations, net of the current portion of $0.1 million and $0.9 million of long-term finance lease obligations, net of the current portion of $0.3 million.


The components of lease expense are as follows: 


    Three months ended
March 31,
Operating lease expense   $ 93,045  
Finance lease cost        
Amortization of right-to-use assets   $ 20,324  
Interest on lease liabilities   $ 5,930  
Total finance lease cost   $ 26,254  


Supplemental cash flow information and non-cash activity related to leases are as follows:


    Three months ended
March 31,
Cash flow information:      
Cash paid for amounts included in the measurement of lease liabilities:      
Operating cash flows from operating leases   $ 85,869  
Operating cash flows from finance leases   $ 5,930  
Financing cash flows from finance leases   $ 17,635  
Non-cash activity:        
Right-of-use assets obtained in exchange for lease obligations:        
Operating leases   $ 1,107,139  
Finance Leases   $ 282,045  


Weighted-average remaining lease terms are as follows:


    As of
March 31,
Weighted average remaining lease term:      
Operating leases   3.5 years  
Finance Leases   3.4 years  


As most of the Company’s leases do not provide an implicit rate, the Company use its incremental borrowing rate based on the information available at adoption date in determining the present value of lease payment. Below is information of the incremental borrowing rate used:


Weighted average discount rate:      
Operating leases     8 %
Finance Leases     8 %


Maturities of lease liabilities are as follows: 


Year ending December 31,   Operating
2019 (excluding three months ended March 31, 2019)   $ 272,802     $ 70,695  
2020     375,352       94,260  
2021     377,714       94,260  
2022     252,907       64,144  
2023     -       3,912  
Total lease payments   $ 1,278,775     $


Less imputed interest     (164,461 )     (42,538 )
Present value of lease liabilities   $ 1,114,314     $ 284,733