Note 15 - Lease

On June 17, 2013, the Company entered into a lease agreement for office, warehouse, storage, and distribution space with a five year term, commencing on November 1, 2013 and expiring on October 31, 2018. The lease agreement also provides an option to extend the term for an additional six years. On April 23, 2018, the Company extended the lease for another 36 months with an expiration date of October 31, 2021. The monthly rental payment is $42,000 with an annual 3% increase.

On January 7, 2014, the Company entered into a sublease agreement with Diamond Bar for warehouse space with a five-year term commencing on November 1, 2013 and which expired on October 31, 2018. The Company subleased a portion of its warehouse space to one of its customers with a one-year term commencing on December 1, 2013 and expiring on November 30, 2014, which had been renewed every year, expired on October 31, 2018 and was not renewed. The sublease income of $6,000 per month was recorded against the rental expense. During the year ended December 31, 2018, the Company recorded $47,330 in sublease income.

On September 13, 2017, Bright Swallow renewed the lease for another two year term, commencing on October 1, 2017 and expiring on September 30, 2019. The monthly rental payment is 20,000 Hong Kong Dollars ($2,548). The Company terminated the lease on December 31, 2018.

The Company has entered into several lease agreements for office and warehouse space in Commerce, California and showroom space in Las Vegas, Nevada and High Point, North Carolina on monthly or annual terms.

Total rental payments from continuing operations for the years ended December 31, 2019 and 2018 were $1,110,725 and $855,201, respectively. Total rental payments from discontinued operations for the years ended December 31, 2019 and 2018 were $0 and $30,618, respectively.

The components of lease costs, lease term and discount rate with respect of leases with an initial term of more than 12 months are as follows:

	2019

Operating lease cost	$	620,980
Weighted Average Remaining Lease Term - Operating leases	4.84 years
Weighted Average Discount Rate - Operating leases		5	%

The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2019:

	Operating Leases
Fiscal year 2020	$	604,811
Fiscal year 2021		622,956
Fiscal year 2022		641,644
Fiscal year 2023		660,894
Thereafter		508,000
Total undiscounted cash flows		3,038,305
Less: imputed interest		(346,176	)
Present value of lease liabilities	$	2,692,129