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Leases

9 Months Ended

Sep. 30, 2022

Note 15. Leases

In 2011, the Company executed a lease (the “Lease”) with Brandywine Operating Partnership, L.P. (“Brandywine”), a Delaware limited partnership, for a 10,870 square foot premises located in Lawrenceville, New Jersey and relocated its offices to Lawrenceville, New Jersey from Columbia, Maryland. The Lease had an initial term of 66 months. In late 2015, Lenox Drive Office Park LLC purchased the real estate and office building and assumed the Lease. This Lease was set to expire on April 30, 2017. In April 2017, the Company and the landlord amended the Lease effective May 1, 2017. The 1^st Lease Amendment extended the term of the agreement for an additional 64 months, reduced the premises to 7,565 square feet, reduced the monthly rent and provided four months free rent. The monthly rent ranged from approximately $18,900 in the first year to approximately $20,500 in the final year of the 1^st Lease Amendment. Effective January 9, 2019, the Company amended the current terms of the 1^st Lease Amendment to increase the size of the premises by 2,285 square feet to 9,850 square feet and also extended the lease term by one year to September 1, 2023. The monthly rent ranges from approximately $25,035 in the first year to approximately $27,088 in the final year of the 2^nd Lease Amendment.

In connection with the EGEN Asset Purchase Agreement in June 2014, the Company assumed the existing lease with another landlord for an 11,500 square foot premises located in Huntsville Alabama. In January 2018, the Company and the Huntsville landlord entered into a new 60-month lease which reduced the premises to 9,049 square feet with rent payments of approximately $18,100 per month. On June 9, 2021 and, as amended on July 7, 2021, the Company and the Huntsville landlord entered into a 22-month lease for an additional 2,197 square foot premises with rent payments of approximately $5,500 per month.

The Company adopted ASC Topic 842 on January 1, 2019 using the modified retrospective transition method for all lease arrangements at the beginning of the period of adoption.

Following is a table of the lease payments and maturity of our operating lease liabilities as of September 30, 2022:


Remainder of 2022	$	150,774
2023		238,609
and thereafter		–
Subtotal future lease payments		389,383
Less imputed interest		(15,858	)
Total lease liabilities	$	373,525

Weighted average remaining life		0.8

Weighted average discount rate		9.98	%

For the three-month and nine-month periods ended September 30, 2022, operating lease expense was $146,936 and $440,808, respectively, and cash paid for operating leases included in operating cash flows was $150,774 and $450,721, respectively.

For the three-month and nine-month periods ended September 30, 2021, operating lease expense was $146,936 and $413,577, respectively, and cash paid for operating leases included in operating cash flows was $149,115 and $418,696, respectively.