Quarterly report pursuant to Section 13 or 15(d)

Leases

Leases

6 Months Ended

Jun. 30, 2019

Our leases principally consist of operating leases related to our corporate office, field offices, and our research, manufacturing and storage facilities. Our lease terms do not include options to extend or terminate the lease until we are reasonably certain that we will exercise that option.

At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. maintenance, labor charges, etc.). The Company generally accounts for each component separately based on the estimated standalone price of each component.

Operating leases are included in Right-of-use assets, Lease obligations, current and Lease obligations, long term on the Condensed Consolidated Balance Sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using an incremental borrowing rate consistent with the lease terms or implicit rates, when readily determinable. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

Lease expense for operating leases, which principally consists of fixed payments for base rent, is recognized on a straight-line basis over the lease term. Lease expense for the three and six months ended June 30, 2019 was $192,674 and $372,371,respectively.

Supplemental information related to leases for the six months ended June 30, 2019 was as follows:



Cash paid for amounts included in the measurement of operating lease liabilities	$	319,436
Right-of-use assets obtained in exchange for operating lease liabilities	$	2,628,299
Weighted-average remaining lease term - operating leases	4.5 years
Weighted-average discount rate - operating leases	6		%

Future minimum lease commitments under non-cancellable operating leases as of June 30, 2019 were as follows:



	Operating Leases
Q3 through Q4 2019	$	375,423
2020	649,801
2021	576,698
2022	529,115
2023	536,863
Thereafter	134,700
Total lease payments	2,802,600
Less: imputed interest	381,019
Total	$	2,421,581