Quarterly report pursuant to Section 13 or 15(d)

Operating and Finance Leases

v3.20.2
Operating and Finance Leases
6 Months Ended
Jun. 30, 2020
Lease Liability [Abstract]  
Operating and Finance Leases

NOTE 8 - Operating and Finance Leases

 

  A. Lease term and discount rate:

 

The weighted-average remaining lease term (in years) and discount rate related to the leases were as follows:

  

Weighted-average remaining lease term   Unaudited  
Operating lease     2.15 Years  
Finance lease     4.35 Years  
Weighted-average discount rate        
Operating lease     6.00 %
Finance lease     3.82 %

 

  B. The balances of the operating and finance leases are presented as follows within the balance sheets as of June 30, 2020 and December 31, 2019:

 

Operating Leases

 

    June 30,
2020
    December 31,
2019
 
    (Unaudited)        
Right-of-use assets   $ 343,005     $ 302,602  
Lease liability - current   $ 306,829     $ 322,430  
Lease liability – non-current   $ 161,223     $ -  

 

Finance Leases

 

    June 30,
2020
    December 31,
2019
 
    (Unaudited)        
Property and equipment, at cost   $ 56,770     $ 56,770  
Accumulated depreciation     (7,501 )     (1,569 )
Property and equipment, net   $ 49,269     $ 55,201  
                 
Lease liability - current   $ 10,302     $ 9,949  
Lease liability – non-current     40,721       45,199  
Total finance lease liabilities   $ 51,023     $ 55,148  

 

The components of lease expense are as follows within the statements of operations and comprehensive loss for the six-month periods ended June 30, 2020 and 2019:

 

Operating Leases

 

    Three Months Ended     Six Months Ended  
    June 30,
2020
    June 30,
2019
    June 30,
2020
    June 30,
2019
 
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  
Lease expense   $ 108,348     $ 128,286     $ 220,345     $ 243,995  
Sublease rental income     (2,791 )     -       (5,545 )     -  
Net lease expense   $ 105,557     $ 128,286     $ 214,800     $ 243,995  

 

Finance Leases

 

    Three Months Ended     Six Months Ended  
    June 30,
2020
    June 30,
2019
    June 30,
2020
    June 30,
2019
 
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  
Amortization of right-of-use asset   $ 2,841     $      -     $ 5,932     $       -  
Interest on lease liabilities     496       -       1,012       -  
Total finance lease cost   $ 3,337     $ -     $ 6,944     $ -  

 

Supplemental cash flow information related to leases for the six-month periods ended June 30, 2020 and 2019 is as follows:

 

    June 30,
2020
    June 30,
2019
 
    (Unaudited)     (Unaudited)  
Cash paid for amounts included in the measurement of lease liabilities:            
Operating cash outflows from operating leases   $ 93,689     $ 83,685  
Operating cash outflows from finance lease   $ 5,926     $ -  
Financing cash outflows from finance lease   $ 1,012     $ -  
Leased assets obtained in exchange for lease liabilities:                
Operating leases   $ 261,781     $ 722,423  

 

Maturity of lease liabilities:

 

Operating Leases

 

    (Unaudited)  
July 1, 2020 – June 30, 2021   $ 320,500  
July 1, 2021 – June 30, 2022     89,256  
July 1, 2022 – June 30, 2023     81,818  
Total lease payments     491,574  
Less: Imputed interest     (23,522 )
Present value of lease liabilities     468,052  
Current portion     (306,829 )
Non-current portion   $ 161,223  

 

Finance Leases

 

    (Unaudited)  
July 1, 2020 – June 30, 2021   $ 12,073  
July 1, 2021 – June 30, 2022     12,073  
July 1, 2022 – June 30, 2023     12,073  
July 1, 2023 – June 30, 2024     12,073  
July 1, 2024 – June 30, 2025     7,421  
Total lease payments     55,713  
Less: Imputed interest     (4,690 )
Present value of lease liabilities     51,023  
Current portion     (10,302 )
Non-current portion   $ 40,721