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Leases

6 Months Ended

Jun. 30, 2023

(10) Leases

The following was included in our balance sheet as of June 30, 2023:

	June 30,
Operating leases	2023
Assets
ROU operating lease assets	$	3,783,328

Liabilities
Current portion of operating lease obligations	$	514,905
Operating lease obligations, net of current portion	$	3,431,544
Total operating lease liabilities	$	3,946,449
Financing leases
Assets
Property and equipment	$	234,036
Accumulated depreciation		(132,771	)
Property and equipment, net	$	101,265

Liabilities
Current portion of financing lease obligations	$	16,401
Financing lease obligations, net of current portion	$	41,037
Total financing lease liabilities	$	57,438

The weighted average remaining lease term and weighted average discount rate at June 30, 2023 were as follows:

Weighted average remaining lease term (years)	June 30, 2023
Operating leases		9.61
Financing leases		3.45
Weighted average discount rate
Operating leases		4.46	%
Financing leases		4.73	%

Financing Lease

The Company entered into several 60-month lease agreements to finance certain laboratory and office equipment. As such, the Company has accounted for these transactions as a financing lease.

The following table reconciles future minimum financing lease payments to the discounted lease liability as of June 30, 2023:

2023 - remaining	$	9,373
2024		18,751
2025		18,186
2026		11,976
2027		3,992
Total lease payments		62,278
Less imputed interest		(4,840	)
Total lease obligations		57,438
Less current obligations		(16,401	)
Long-term lease obligations	$	41,037

Operating Leases

On December 4, 2015, the Company entered into a new operating lease agreement to rent office space in Bohemia, NY. This five-year agreement commenced February 1, 2016, with an annual rent of $50,000 and 3.75% increases in each successive lease year. On January 13, 2021, a lease rider was annexed to the original lease whereby the lease term will be extended on a month-by-month basis, commencing on February 1, 2021. The lease was terminated in April 2022.

On September 12, 2019, the Company entered into a new operating lease agreement to rent office space in Ronkonkoma, NY. This five- year agreement commenced on September 12, 2019, with an annual rent of $90,000 and 3% increase in each successive lease year beginning in 2021. The Company has an option to buy the property during the first two years of the lease for $1,200,000 and then at fair market value for the remainder of the lease term. This option has expired and was not exercised. On April 13, 2023, this lease was terminated subject to the terms of a Surrender Agreement between the Company and landlord. As a result, a gain on termination of right-of-use operating lease was recognized of $8,461.

On November 27, 2019, the Company entered a 39-month agreement to lease an automobile with a monthly payment of $420. This lease was paid in full as of March 31, 2023.

On December 15, 2021, the Company assumed the SSM lease agreement for office and warehouse space in San Jose, CA, with the same terms and conditions. Effective February 1, 2020, the lease term will expire on January 31, 2025, with a base rent of $24,234 for the first 12 months and increase by approximately 3% every year.

On October 15, 2021, the Company entered a new lease for a 20,000 square foot facility at 155 Plant Avenue, Hauppauge, New York, for a term of seven years and two months. The yearly base rent of $346,242 shall increase at a rate of 2.75% per year to begin on the first anniversary lease commencement date and each year thereafter. The first two months of basic rent shall be abated following the commencement lease date. In the event the landlord decides to sell the property, the Company shall have the right of first offer to purchase subject property. Upon lease execution, the Company paid two months of base rent as a security deposit and one month’s rent totaling $86,560. The Company moved into the new manufacturing and headquarters facility April 1, 2022.

The following table reconciles future minimum operating lease payments to the discounted lease liability as of June 30, 2023:

2023 - remaining	$	336,444
2024		689,103
2025		400,321
2026		383,347
2027		393,889
Thereafter		2,718,181
Total lease payments		4,921,285
Less imputed interest		(974,836	)
Total lease obligations		3,946,449
Less current obligations		(514,905	)
Long-term lease obligations	$	3,431,544