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LEASES

12 Months Ended

Dec. 31, 2020

11.

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, 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 years ended December 31, 2020 and 2019, the Company’s operating lease expense was $ 1,625,539 and $1,761,374, respectively.

Future minimum lease payments under non-cancellable operating leases as of December 31, 2020 were as follows:

Year ending December 31,

2021	$	1,964,815
2022		1,946,746
2023		657,667
2024		8,349
Total undiscounted operating lease payments		4,577,577
Less imputed interest		(221,191	)
Present value of operating lease payments	$	4,356,386

The following table sets forth the ROU assets and operating lease liabilities as of December 31, 2020 and 2019:

	2020		2019
Assets
ROU Assets-Net	$	4,075,048	$	3,886,863

Liabilities
Current operating lease liabilities	$	1,819,237	$	1,709,153
Long-term operating lease liabilities		2,537,149		2,596,784
Total ROU liabilities	$	4,356,386	$	4,305,937

The right-of-use assets under operating leases was $4,075,048 and $3,886,863 at December 31, 2020 and 2019, respectively. The non-cash amortization expense of these assets under operating leases was $1,783,280 and $1,761,374 for the years ended December 31, 2020 and 2019, respectively.

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

On November 10, 2021, the Company executed the second amendment to the lease agreement for its manufacturing and office space, which extends the lease agreement’s expiration date to April 30, 2026.