The Company has no finance leases and its operating leases for a warehouse and equipment terminated on August 15, 2021. The ROU asset value was determined based on the lease liability adjusted for lease incentives received. Lease expense has been recognized on a straight-line basis over the lease term. Certain costs incidental to the use of the property were separate from the minimum rent payment and were not considered in the determination of the lease liability and ROU asset. The Company elected the policy to not separate lease from non-lease components if they are

combined with the minimum rent payment. The option periods were not included in the determination of the lease liability and right-of-use asset.

The operating lease cost component of the lease expense was $38,892 for the nine-month period ended September 30, 2021. The cash paid for amounts included in the measurement of lease liabilities as a component of cash flows related to leases was $38,892 for the nine months ended September 30, 2021. The operating lease cost component of the lease expense was $69,689 for the nine-month period ended September 30, 2020. The cash paid for amounts included in the measurement of lease liabilities as a component of cash flows related to leases was $69,689 for the nine months ended September 30, 2020.

Assets and liabilities associated with these leases included in the Condensed Balance Sheets are as follows:


	September 30, 2021		December 31, 2020
OPERATING LEASES
Other assets	$	—	$	38,892
Other accrued liabilities	$	—	$	38,892
Other long-term liabilities		—		—
Total operating lease liabilities	$	—	$	38,892