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LEASES

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

4. lEases

The Company leases a building and equipment. Under ASC 842, at contract inception we determine whether the contract is or contains a lease and whether the lease should be classified as an operating or a financing lease. Operating leases are included in ROU assets and operating lease liabilities in our consolidated balance sheets.

The Company leases manufacturing and office space under an agreement classified as an operating lease.

The lease agreement expires on April 30, 2022 and does not include any renewal options. The agreement provides for an initial monthly base amount plus annual escalations through the term of the lease.

In addition to the monthly base amounts in the lease agreement, the Company is required to pay real estate taxes and operating expenses during the lease terms.

The Company also leases office equipment in agreements classified as operating leases.

For the three and nine months ended September 30, 2019, the Company’s operating lease expense was $439,825 and $1,319,764, respectively.

Future minimum lease payments under non-cancellable operating leases as of September 30, 2019 were as follows:

	Twelve months ending September 30,
	2020		$	1,910,384
	2021			1,953,865
	2022			1,175,727
	2023			55,322
	2024			11,631
	Total undiscounted operating lease payments			5,106,929
	Less imputed interest			(399,975	)
	Present value of operating lease payments		$	4,706,954

The following table sets forth the ROU assets and operating lease liabilities as of September 30, 2019:

	Assets
	ROU Assets		$	4,259,868

	Liabilities
	Current operating lease liabilities		$	1,673,244
	Long-term operating lease liabilities			3,033,710
	Total ROU liabilities		$	4,706,954

The Company’s weighted average remaining lease term for its operating leases is 2.3 years.