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6. LEASES

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

In April 2018, we entered into a 10-year lease agreement for a new 9,000-square-foot facility that contains office, warehouse, lab and research and development space in Frederick, Maryland. The lease agreement was scheduled to commence on December 1, 2018 or when the property was ready for occupancy. The agreement provided for annual rent of $143,460, an escalation clause that increases the rent 3% year over year, a landlord tenant improvement allowance of $405,000 and additional landlord work as discussed in the lease agreement. We took occupancy of the property on December 17, 2018 and the lease was amended in March 2019 to provide for a 4-month rent holiday and a commencement date of April 1, 2019.

Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

The balances for our operating lease where we are the lessee are presented as follows within our condensed consolidated balance sheet:

Operating leases:		March 31, 2019 (Unaudited)
Assets:
Operating lease right-of-use asset		$	703,823
Liabilities:
Current Portion of Long-Term Operating Lease		$	23,436
Long-Term Operating Lease, Net of Current Portion			1,089,316
		$	1,112,752

The components of lease expense are as follows within our condensed consolidated statement of operations:

General and Administrative Expenses:

Three Months Ended March 31,

2019

(Unaudited)

Operating lease expense

$

39,644

Other information related to leases where we are the lessee is as follows:

		March 31, 2019 (Unaudited)
Weighted-average remaining lease term:
Operating leases		10.00 years

Discount rate:
Operating leases		7.00%

Supplemental cash flow information related to leases where we are the lessee is as follows:

Three Months Ended March 31,

2019

(Unaudited)

Cash paid for amounts included in the measurement of lease liabilities:

$

-

As of March 31, 2019, the maturities of our operating lease liability are as follows:

Year Ended:		Operating Lease
April 1 - December 31, 2019		$	65,753
December 31, 2020			146,688
December 31, 2021			151,088
December 31, 2022			155,621
December 31, 2023			160,290
Thereafter			910,280
Total minimum lease payments			1,589,720
Less: Interest			476,968
Present value of lease obligations			1,112,752
Less: Current portion			23,436
Long-term portion of lease obligations		$	1,089,316

As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2018 and under legacy lease accounting (ASC 840), future minimum lease payments under non-cancellable leases as of December 31, 2018 were as follows:

Year Ended:		Operating Lease
December 31, 2019		$	102,000
December 31, 2020			147,000
December 31, 2021			151,000
December 31, 2022			156,000
December 31, 2023			160,000
Thereafter			923,000
		$	1,639,000