Annual report pursuant to Section 13 and 15(d)

Right-of-Use Assets and Liabilities

v3.20.4
Right-of-Use Assets and Liabilities
12 Months Ended
Dec. 31, 2020
Right-of-Use Assets and Liabilities  
Right-of-Use Assets and Liabilities

Note 14 — Right-of-Use Assets and Liabilities

The Company has signed lease agreements, with the largest being for its office and manufacturing facility in the West Henrietta, New York area under an operating lease that commenced October 3, 2015 and was set to expire on October 3, 2020. This lease has an original five-year term with an option by the Company to renew for two additional three-year terms at pre-agreed to lease rates. On June 25, 2020, the Company exercised the first of two renewal terms, extending our current lease term to October 3, 2023. Operating lease costs under the operating leases totaled $559,975, $572,767 and $462,711 for the years ended December 31, 2020, 2019 and 2018, respectively.

Certain leases provide for increases in future minimum annual rental payments as defined in the lease agreements. The leases generally also include real estate taxes and common area maintenance charges in the annual rental payments. Short-term leases are leases having a term of twelve (12) months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases.

As none of our leases provide an implicit interest rate, we use our incremental borrowing rate to determine our discount rate at lease inception based upon the information available at commencement in determining the present value of lease payments. As of December 31, 2020, the weighted average discount rate was 4.5% and the weighted average remaining lease term was 2.8 years.

Future lease payments under operating leases as of December 31, 2020 were as follows:

2021

$

512,285

2022

 

536,270

2023

 

536,270

2024

 

44,689

Total Future Lease Payments

 

1,629,514

Less: Imputed Interest

 

(112,208)

Total Lease Liability Balance

$

1,517,306