Quarterly report pursuant to Section 13 or 15(d)

Leases

Leases

3 Months Ended

Mar. 31, 2021

Our leases principally consist of operating leases related to our corporate office, field offices, and our research, manufacturing and storage facilities. Our lease terms do not include options to extend or terminate the lease provided and until we are reasonably certain that we will exercise that option.

At inception, we determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of our lease agreements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. maintenance, labor charges, etc.). We account for each component separately based on the estimated standalone price of each component.

Operating leases are included in Right-of-use assets, Lease obligations, current and Lease obligations, long term on the condensed consolidated balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term and using an incremental borrowing rate consistent with the lease terms or implicit rates, when readily determinable. For those leases where it is reasonably certain at the commencement date that we will exercise the option to extend the lease, then the lease term will include the lease extension term. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

Lease expense for operating leases, which principally consist of fixed payments for base rent, is recognized on a straight-line basis over the lease term. Lease expense for the three months ended March 31, 2021 and 2020 was $195,273 and $190,035, respectively.

Supplemental information related to leases for the three months ended March 31, 2021 was as follows:


Cash paid for amounts included in the measurement of operating lease liabilities	$	171,502
Weighted-average remaining lease term - operating leases	4.5 years
Weighted-average discount rate - operating leases	6		%

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


	Operating Leases
Year 1	$	528,787
Year 2	696,635
Year 3	706,791
Year 4	276,342
Year 5	108,775
Thereafter	331,128
Total lease payments	2,648,458
Less: imputed interest	345,005
Total	$	2,303,453