OPERATING LEASE

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

OPERATING LEASE

NOTE 7. OPERATING LEASE

The Company leases approximately 100,000 rentable square feet for its manufacturing and operations. The lease is classified as an operating lease and accounted for accordingly. The Lease term is for 88 months commencing on September 21, 2020 at a rent of $50,000 per month including taxes, insurance and common area maintenance until December 31, 2020. Beginning January 1, 2021, the rent adjusted to $80,000 per month on a triple net basis and shall increase at an annual rate of 3% per annum until December 31, 2027.

As of March 31, 2022 and December 31, 2021, assets and liabilities related to the Company’s lease were as follows:

	As of March 31,		As of December 31,
	2022		2021
Operating lease right-of-use assets, net	$	4,816,017	$	4,984,688
Current portion of operating lease liability		665,585		646,742
Non-current portion of operating lease liability		4,356,168		4,532,490

During the three months ended March 31, 2022 and 2021 the Company recorded operating lease costs included in rent expense of $258,392 and $258,393, respectively.

Future maturities of the operating lease liability are as follows:

Remainder of 2022	$	741,600
2023		1,018,464
2024		1,049,018
2025		1,080,488
2026		1,112,903
Thereafter		1,146,290
Total lease payments		6,148,763
Less amounts representing interest		(1,127,010	)
Present value of lease liability	$	5,021,753

The remaining lease term and discount rate of the operating lease is 69.5 months and 7.0%, respectively.