XML 26 R18.htm IDEA: XBRL DOCUMENT

Operating Lease

3 Months Ended

Mar. 31, 2023

12. OPERATING LEASE

On September 12, 2019, we entered into a lease covering approximately 14,300 square feet of office and warehouse space with a possession date of November 15, 2019 and a commencement date of February 13, 2020. The property is located at 175 Industrial Way in Portland, which is a short distance from our headquarters and manufacturing facility at 56 Evergreen Drive. We renovated this space to meet our needs in expanding our production capacity for the First Defense^® product line. The original lease term was ten years with a right to renew for a second 10-year term and a right of first offer to purchase. At the time we entered into this lease, we were not reasonably assured that we would exercise this renewal option in place of other real estate options. For that reason, a 10-year period was reflected in the right-of-use (ROU) asset and lease liability on our balance sheet. During the third quarter of 2022, we committed to lease an additional 15,400 square feet of space at 165 Industrial Way, which is connected to the original space at 175 Industrial Way, over a 20-year term. The ROU asset and lease liability for the committed space at 165 Industrial Way was recorded as of April 1, 2023. Monthly lease payments commence as of August 1, 2023. In connection with the lease commitment for space at 165 Industrial Way, the term of the original lease for 175 Industrial Way was extended by approximately 13 years. The total lease liability over the amended term (including inflationary adjustments) aggregates $2,247,978. Our lease includes variable non-lease components. Such payments primarily include common area maintenance charges. As of March 31, 2023, the balance of the operating lease ROU asset was $2,178,134 and the operating lease liability was $2,241,241. The calculated amount of the ROU asset and lease liability is impacted by the length of the lease term and the discount rate used for the present value of the minimum lease payments. We elected not to separate lease and non-lease components for all classes of underlying assets, and instead to account for them as a single lease component. Variable lease cost primarily represents variable payments such as real estate taxes and common area maintenance. The following tables describe our lease costs and other lease information:

	During the Three-Month Periods Ended March 31,
	2023			2022
Lease Cost
Operating lease cost	$	47,526		$	29,991
Variable lease cost		7,614			10,350
Total lease cost	$	55,140		$	40,341

Operating Lease
Cash paid for operating lease liabilities	$	30,741		$	29,499
Weighted average remaining lease term (in years)		19.9			7.8
Weighted average discount rate		5.54	%		4.77	%

Future lease payments required under non-cancelable operating leases in effect as of March 31, 2023 were as follows:

	Amount
During the nine-month period ending December 31, 2023	$	116,798
During the years ending December 31,
2024		162,384
2025		165,090
2026		168,395
2027		171,760
Thereafter		3,049,071
Total lease payments (undiscounted cash flows)		3,833,498
Less: imputed interest (discount effect of cash flows)		(1,592,257	)
Total operating liabilities	$	2,241,241