Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.20.2
Leases
9 Months Ended
Sep. 30, 2020
Leases [Abstract]  
LEASES
8. LEASES

 

We determine if a contract contains a lease at inception. Our material operating leases consist of retail and warehouse locations as well as office space. Our leases generally have remaining terms of 1-5 years, most of which include options to extend the leases for additional 3 to 5-year periods. Generally, the lease term is the minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods.

 

Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases. Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term.

 

We have elected the practical expedient to account for lease and non-lease components as a single component for our entire population of leases.

 

Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that we are reasonably certain to exercise, are not recorded on the balance sheet.

 

Lease expense is recorded within our consolidated statements of operations based upon the nature of the assets. Where assets are used to directly serve our customers, such as facilities dedicated to customer contracts, lease costs are recorded in "store operating costs." Facilities and assets which serve management and support functions are expensed through general and administrative expenses.

 

    September 30,
2020
    December 31,
2019
 
Right to use assets, operating lease assets   $ 8,109,184     $ 7,628,591  
                 
Current lease liability   $ 2,037,537     $ 1,836,700  
Non-current lease liability     6,307,463       5,807,266  
    $ 8,345,000     $ 7,643,966  

 

    September 30,
2020
    September 30,
2019
 
Weighted average remaining lease term     2.98       3.9 years  
Weighted average discount rate     7.6 %     7.6 %

 

    Three Months Ended  
    September 30,
2020
    September 30,
2019
 
Operating lease costs   $ 934,455     $ 724,324  
Short-term lease costs     2,450       2,450  
Total operating lease costs   $ 936,905     $ 726,774  

 

    Nine Months Ended  
    September 30,
2020
    September 30,
2019
 
Operating lease costs   $ 2,660,291     $ 1,723,075  
Short-term lease costs     22,050       22,050  
Total operating lease costs   $ 2,682,341     $ 1,745,125  

 

The following table presents the maturity of the Company's operating lease liabilities as of September 30, 2020:      
       
2020 (remainder of the year)   $ 728,304  
2021     2,882,605  
2022     2,442,374  
2023     1,907,782  
2024     1,121,033  
Thereafter     2,963,252  
Total lease payments     12,045,350  
Less: Imputed interest     (3,700,350 )
Lease Liability at September 30, 2020   $ 8,345,000