Quarterly report pursuant to Section 13 or 15(d)


6 Months Ended
Jun. 30, 2020
Leases [Abstract]  


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 elected this expedient to account for lease and non-lease components as a single component for our entire population of operating lease assets.


We have elected the short-term lease recognition exemption for all applicable classes of underlying assets. 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 "cost of sales." Facilities and assets which serve management and support functions are expensed through general and administrative expenses.


    June 30,
    December 31,
Right to use assets, operating lease assets   $ 7,630,644     $ 7,628,591  
Current lease liability   $ 1,959,124     $ 1,836,700  
Non-current lease liability     5,843,739       5,807,266  
    $ 7,802,863     $ 7,643,966  


    June 30,
    June 30,
Weighted average remaining lease term     3.44 years       3.75 years  
Weighted average discount rate     7.6 %     7.6 %


    June 30,
    June 30,
Operating lease costs   $ 1,713,505     $ 1,136,339  
Short-term lease costs     31,932       19,114  
Total operating lease costs   $ 1,745,437     $ 1,155,453  


The following table presents the maturity of the Company's operating lease liabilities as of June 30, 2020:      
2020 (remainder of the year)   $ 1,360,110  
2021     2,721,296  
2022     2,276,428  
2023     1,737,060  
2024     945,391  
Thereafter     2,191,974  
Total lease payments     11,232,259  
Less: Imputed interest     (3,429,396 )
Lease Liability at June 30, 2020