General form of registration statement for all companies including face-amount certificate companies

12. Operating Lease Right-of-use Assets and Operating Lease Liability

v3.21.1
12. Operating Lease Right-of-use Assets and Operating Lease Liability
3 Months Ended 12 Months Ended
Mar. 31, 2021
Dec. 31, 2020
Leases [Abstract]    
Operating Lease Right-of-use Assets and Operating Lease Liability

Note 9 – Operating Lease Right-of-use Asset and Operating Lease Liability

 

Operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 15%, as the interest rate implicit in our lease is not readily determinable. During the three months ended March 31, 2021 and 2020, the Company recorded $16,295 and $16,295, respectively as operating lease expense.

 

The Company currently has a lease agreement for AVX’s operation for a monthly payment of $5,258 and shall increase by 3% every year. The lease commenced July 1, 2015 and expires on August 31, 2022. A security deposit of $5,968 was also held for the duration of the lease term.

 

In adopting ASC Topic 842, Leases (Topic 842), the Company has elected the ‘package of practical expedients,’ which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 months or less. On March 15, 2019 when AVX was acquired, upon adoption of ASC Topic 842, the Company recorded a right-of-use asset.

 

Right-of-use asset is summarized below:

 

    March 31, 2021     March 31, 2020  
Office lease   $ 157,213     $ 157,213  
Less: accumulated amortization     (82,197 )     (38,669 )
Right-of-use asset, net   $ 75,016     $ 118,544  

 

Operating Lease liability is summarized below:

    March 31, 2021     March 31, 2020  
Office lease   $ 73,025     $ 128,707  
Less: current portion     (55,890 )     (46,415 )
Long-term portion   $ 17,135     $ 82,292  

 

Maturity of lease liability is as follows:

 

Year ending December 31, 2021   $ 48,273  
Year ending December 31, 2022     43,655  
Total future minimum lease payment     91,928  
Imputed interest     (9,636 )
Lease Obligation, net   $ 82,292  

Note 12 – Operating Lease Right-of-use Asset and Operating Lease Liability

 

Operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 15%, as the interest rate implicit in our lease is not readily determinable. During the years ended December 31, 2020 and 2019, the Company recorded $65,180 and $62,322, respectively as operating lease expense.

 

The Company currently has a lease agreement for AVX’s operation for a monthly payment of $5,258 and shall increase by 3% every year. The lease commenced July 1, 2015 and expires on August 31, 2022. A security deposit of $5,968 was also held for the duration of the lease term.

 

In adopting ASC Topic 842, Leases (Topic 842), the Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 months or less. On March 15, 2019 when AVX was acquired, upon adoption of ASC Topic 842, the Company recorded a right-of-use asset.

 

Right-of-use asset is summarized below:

 

    December 31, 2020     December 31, 2019  
Office lease   $ 157,213     $ 157,213  
Less: accumulated amortization     (70,655 )     (28,814 )
Right-of-use asset, net   $ 86,558     $ 128,399  

  

Operating Lease liability is summarized below:

 

    December 31, 2020     December 31, 2019  
Office lease   $ 94,671     $ 138,940  
Less: current portion     (53,384 )     (44,270 )
Long term portion   $ 41,287     $ 94,670  

 

Maturity of lease liability is as follows:

 

Year ending December 31, 2021   $ 64,048  
Year ending December 31, 2022     43,655  
Total future minimum lease payment     107,703  
Imputed interest     (13,032 )
Lease Obligation, net   $ 94,671