Quarterly report pursuant to Section 13 or 15(d)

Operating Leases

v3.20.2
Operating Leases
9 Months Ended
Sep. 30, 2020
Operating Leases  
Note 10 - Operating Leases

In 2016, the Company entered into a six-year agreement to lease trailers used in the delivery of its products. Monthly payments currently total $32,820.

 

On January 27, 2015, the Company entered into a lease for office space in Lewis Center, Ohio, commencing February 1, 2015 which lease as amended expired in February 2020. The lease provides for the option to extend the lease for up to five additional years. Monthly rent is $1,575 through February 2020. The Company did not renew this lease.

 

On July 1, 2015, the Company entered into a five-year lease for warehouse space in Corsicana, Texas. Rent is $3,750 monthly throughout the term of the lease. The Company is also responsible for the pro rata share of the projected monthly expenses for the property taxes. The current pro rata share is $882. The lease was extended on June 1, 2019 for five years. The Company recorded a right of use asset and an operating lease liability of $145,267. This amount represents the difference between the value from the remaining lease and the extended lease.

 

On September 1, 2019, the Company entered into a one-year lease for office space in Grand Forks, North Dakota. Monthly rent was $590 a month through August 2020. The lease has not been renewed and has been terminated.

 

Future remaining minimum lease payments under these non-cancelable leases are as follows:

 

For the twelve months ended September 30,

 

 

 

2021

 

$

438,840

 

2022

 

 

402,520

 

2023

 

 

92,040

 

2024

 

 

22,500

 

Total

 

 

955,900

 

Less discount

 

 

(54,447

)

Total lease liabilities

 

 

901,453

 

Less current portion

 

 

(402,918

)

Operating lease obligation, net of current portion

 

$

498,535

 

 

The weighted average remaining lease term for operating leases is 2.27 years and the weighted average discount rate used in calculating the operating lease asset and liability is 5.0%. For the nine months ended September 30, 2020, payments on lease obligations were $329,130 and amortization on the right of use assets was $212,372.

 

For the three and nine months ended September 30, 2020, the Company’s lease cost consists of the following components, each of which is included in costs and expenses within the Company’s consolidated statements of operations:

 

 

 

Three Months

Ended

September 30,

2020

 

 

Nine Months

Ended

September 30,

2020

 

 

 

 

 

 

 

 

Operating lease cost

 

$

92,133

 

 

$

289,263

 

Short-term lease cost (1)

 

 

1,770

 

 

 

5,310

 

Total lease cost

 

$

93,903

 

 

$

294,573

 

_____________ 

(1)

Short-term lease costs include any lease with a term of less than 12 months