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LEASES

12 Months Ended

Dec. 31, 2021

10.

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, as amended, expires on April 30, 2026 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, 2021 and 2020, the Company’s operating lease expense was $1,873,455 and $1,625,539 respectively.

Future minimum lease payments under non-cancellable operating leases as of December 31, 2021 were as follows:

Year ending December 31,

2022	$	1,946,746
2023		2,028,443
2024		2,105,636
2025		2,160,206
2026		727,128
Total undiscounted operating lease payments		8,968,159
Less imputed interest		(941,978	)
Present value of operating lease payments	$	8,026,181

The following table sets forth the ROU assets and operating lease liabilities as of December 31, 2021 and 2020:

	2021		2020
Assets
ROU Assets-Net	$	7,796,768	$	4,075,048

Liabilities
Current operating lease liabilities	$	1,580,453	$	1,819,237
Long-term operating lease liabilities		6,445,728		2,537,149
Total ROU liabilities	$	8,026,181	$	4,356,386

The non-cash amortization expense of these assets under operating leases was $1,717,365 and $1,783,280 for the years ended December 31, 2021 and 2020, respectively.

The Company’s weighted average remaining lease term for its operating leases is 4.3 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.