Annual report pursuant to Section 13 and 15(d)

Property and Equipment

v3.20.4
Property and Equipment
12 Months Ended
Dec. 31, 2020
Property, Plant and Equipment [Abstract]  
Property and Equipment Property and Equipment
 
Property and equipment as of December 31, 2020 and 2019 consisted of the following:
 
  December 31,
  2020 2019
Furniture and equipment $ 152,940  $ 143,168 
Computers and software 56,240  6,708 
Right-of-use assets 917,472  718,628 
Leasehold improvements 657,328  657,328 
Total property and equipment 1,783,980  1,525,832 
Less accumulated depreciation (176,910) (78,169)
Property and equipment, net $ 1,607,070  $ 1,447,663 
    

Depreciation expense was $102,095 and $119,488 for the years ended December 31, 2020 and December 31, 2019, respectively.

Leases

The Company currently occupies two leased properties, both of which serve as administrative office space. The Company determined that both leases are operating leases based on the lease classification test performed at lease commencement.
The annual base rent for the Company's office located in Rockville, Maryland is $161,671, subject to annual 2.5% increases over the term of the lease. The lease provided for a rent abatement for a period of 12 months following the Company's date of occupancy. The lease has an initial term of 10 years from the date the Company makes its first annual fixed rent payment, which occurred in January 2020. The Company has the option to extend the lease two times, each for a period of five years, and may terminate the lease as of the sixth anniversary of the first annual fixed rent payment, upon the payment of a termination fee. As of the lease commencement date, it was not reasonably certain that the Company will exercise the renewal periods or early terminate the lease and therefore, the end date of the lease for accounting purposes is January 31, 2030.

The Company entered into a sublease for additional administrative office space in Chesterbrook, Pennsylvania in May 2020 (the “Chesterbrook Lease”"). The annual base rent under the Chesterbrook Lease is $280,185. The lease expires in November 2021.

The weighted average remaining term of the operating leases at December 31, 2020 was 7.7 years.

Supplemental balance sheet information related to the leased properties include:
  As of
  December 31, 2020 December 31, 2019
Property and equipment, net $ 917,472  $ 718,626 
Accrued expenses and other current liabilities $ 426,346  $ 155,815 
Other long-term liabilities 1,038,395  1,111,965 
Total operating lease liabilities $ 1,464,741  $ 1,267,780 

The operating lease ROU assets are included in property and equipment and the lease liabilities are included in accrued expenses and other current liabilities and other long-term liabilities in our consolidated balance sheets. The Company utilized a weighted average discount rate of 7.4% to determine the present value of the lease payments.

The components of lease expense for the years ended December 31, 2020 and 2019 were as follows:
  Year Ended December 31,
2020 2019
Operating lease cost* $ 344,625  $ 160,767 
*Includes short-term leases, which are immaterial.

The following table shows a maturity analysis of the operating lease liability as of December 31, 2020:
 
  Undiscounted Cash Flows
2021 $ 426,346 
2022 173,748 
2023 178,092 
2024 182,544 
2025 187,108 
Thereafter 813,638 
Total lease payments $ 1,961,476 
Less implied interest (496,735)
Total $ 1,464,741