Quarterly report pursuant to Section 13 or 15(d)

10. Leases

10. Leases
3 Months Ended
Mar. 31, 2021
Leases [Abstract]  

10. Leases


Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Leases with a term greater than one year are recognized on the balance sheet at the time of lease commencement or modification of an ROU operating lease asset and a lease liability, initially measured at the present value of the lease payments. Lease costs are recognized in the income statement over the lease term on a straight-line basis. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.


The Company's leases consist of real estate leases for office spaces. The Company elected to combine the lease and related non-lease components for its operating leases.


The Company’s operating leases include options to extend or terminate the lease, which are not included in the determination of the ROU asset or lease liability unless reasonably certain to be exercised. The Company's operating leases have remaining lease terms of less than two years. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.


As the Company's leases do not provide an implicit rate, we used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The discount rate used in the computations ranged between 6% and 12%.


Balance Sheet Classification of Operating Lease Assets and Liabilities


    Balance Sheet Line   March 31, 2021  
Operating lease right of use assets   Noncurrent assets   $ 4,242,124  
Lease liabilities   Noncurrent liabilities   $ 4,342,018  


Lease Costs


The table below summarizes the components of lease costs for the three months ended March 31, 2021.


    Three Months Ended
March 31, 2021
Operating lease costs   $ 278,117  


Maturities of Lease Liabilities


Maturities of lease liabilities as of March 31, 2021 are as follows:


2021 fiscal year   $ 4,418,867  
Less: Interest     (76,848 )
Present value of lease liabilities   $ 4,342,018  


The following table presents the Company’s future minimum lease obligation under ASC 840 as of March 31, 2021:


2021 fiscal year     1,109,215  
2022 fiscal year     1,479,393  
2023 fiscal year     1,354,595  
2024 fiscal year     723,590  
2025 fiscal year     333,356  
2026 fiscal year     178,648  
Total     5,178,796