Quarterly report pursuant to Section 13 or 15(d)

12. Leases

12. Leases
9 Months Ended
Sep. 30, 2019
Leases [Abstract]  

12. 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 a right of use (“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 was 6%.


Balance Sheet Classification of Operating Lease Assets and Liabilities


    Balance Sheet Line   September 30, 2019  
Operating lease asset   Non-Current Assets   $ 168,344  
Operating lease liability   Non-Current Liabilities   $ 121,835  


Lease Costs


The table below summarizes the components of lease costs for the nine months ended September 30, 2019.



Nine Months Ended

September 30, 2019

Operating lease costs   $ 118,767  


Maturities of Lease Liabilities


Maturities of lease liabilities as of September 30, 2019 are as follows:


2019 fiscal year   $ 62,952  
2020 fiscal year     67,904  
Total lease payments     130,856  
Less: Interest     (9,021 )
Present value of lease liabilities   $ 121,835  


The following table presents the Company’s future minimum lease obligation under ASC 840 as of December 31, 2018:


2019 fiscal year   $ 248,808  
2020 fiscal year   $ 67,904