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LEASES

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

LEASES

3.            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 (right-of-use) 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, as amended, expires on April 30, 2023 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 nine and three months ended September 30, 2020, the Company’s operating lease expense was $1,324,831 and $441,610 respectively.

Future minimum lease payments under non-cancellable operating leases as of September 30, 2020 were as follows: 

Twelve months ending September 30,
2021			$	1,953,864
2022				1,175,727
2023				55,322
2024				11,631
2025				—
Total undiscounted operating lease payments				3,196,544
Less imputed interest				(162,835	)
Present value of operating lease payments			$	3,033,709

The following table sets forth the ROU assets and operating lease liabilities as of September 30, 2020:

Assets
ROU assets		$	2,730,567
Liabilities
Current operating lease liabilities		$	1,821,136
Long-term operating lease liabilities			1,212,573
Total ROU liabilities		$	3,033,709

The Company’s weighted average remaining lease term for its operating leases is 1.6 years.

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- Definition

The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 840
-URI http://asc.fasb.org/topic&trid=2208923

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