Annual report pursuant to Section 13 and 15(d)

Operating Lease Assets

v3.21.1
Operating Lease Assets
12 Months Ended
Dec. 31, 2020
Operating Lease Assets [Abstract]  
Operating Lease Assets

5.  Operating Lease Assets



Adoption of Accounting Standards Codification (“ASC”) Topic 842, “Leases." The Company adopted Topic 842 on January 1, 2019, using the modified retrospective method and the optional transition method to record the adoption impact through a cumulative adjustment to equity. Results for reporting periods beginning after January 1, 2019, are presented under Topic 842, while prior periods are not adjusted and continue to be reported under the accounting standards in effect for those periods.



The following are additional details related to leases recorded on our balance sheet as of December 31, 2020:





 

 

 

 



 

 

 

 

Leases

Classification

 

Balance at
December 31,
2020

Assets

 

 

 

 

Current

 

 

 

 

     Operating lease assets

Operating lease assets

 

$

47,038 

Noncurrent

 

 

 

 

     Operating lease assets

Noncurrent operating lease assets

 

 

10,444 

Total lease assets

 

 

$

57,482 



 

 

 

 

Liabilities

 

 

 

 

Current

 

 

 

 

     Operating lease liabilities

Operating lease liabilities

 

$

58,173 

Noncurrent

 

 

 

 

     Operating lease liabilities

Noncurrent operating lease liabilities

 

$

13,296 

Total lease liabilities

 

 

$

71,469 



During the year ended December 31, 2020, we recorded a credit to amortization expense of $17,214 and during the year ended December 31, 2019, we recorded expenses of $4,419 related to the accretion of the lease liability, which is included in depreciation and amortization in the consolidated statement of operations.



Rent expense was $317,774 and $320,496 for the years ended December 31, 2020 and 2019, respectively.



We have entered into a new lease starting in February of 2021 for 8,898 square feet of office space located at 3133 W. Frye Road, Suite 215, Chandler, Arizona.  Monthly rental payments, excluding common area maintenance charges, will be $25,953 to $28,733.  The first twelve months of the lease includes a 50% abatement period.  An operating lease asset and liability will be recorded when the lease commences in accordance with ASC 842.



The maturity analysis below summarizes the remaining future undiscounted cash flows for our operating leases, a reconciliation to operating lease liabilities reported on the Condensed Consolidated Balance Sheet, our weighted-average remaining lease term and weighted average discount rate:







 

 



 

 

Year ending December 31,

Amount

2021

$

60,592 

2022

 

13,484 

2023

 

 —

2024

 

 —

2025

 

 —

Thereafter

 

 —

   Total future lease payments

 

74,076 

   Less: imputed interest

 

(2,607)

Total

$

71,469 







 

 



 

 

Weighted Average Remaining Lease Term (years)

 

 

   Operating leases

 

0.57 



 

 

Weighted Average Discount Rate

 

 

   Operating leases

 

6.75%