Leases

3 Months Ended

Sep. 30, 2020

PaymentOnCapitalLease

Note Payable Related Party

Note 7. Leases

In November 2009, the Company entered into a lease agreement for its corporate office and warehouse facility which became effective in January 2010 for a term of sixty-seven months. In September 2014, the lease was amended to include the following: 1) an extension of the lease term to February 28, 2021; 2) modification of the minimum annual and monthly rents for the extended lease term; 3) a rent abatement period of six months commencing October 1, 2014; and 4) an option to extend the term for a period of five years. In August 2020, a second amendment to the lease was executed to include: 1) an extension of the lease term to August 31, 2026; 2) modification of the minimum annual and monthly rents for the second extended lease term; 3) a rent abatement period of six months commencing October 1, 2020; and 4) removal of the option to extend the term beyond the amended expiration date.

In September 2020, the remaining balances in the right-of-use asset and lease liability associated with the first amendment to the lease of $37,016 and $44,417, respectively, were eliminated and the difference of $7,401 was adjusted as a credit to rent expense. On September 30, 2020, the right-of-use asset and corresponding lease liability of $462,858 were recorded to account for the second amendment to the lease.

The following table summarizes the right-of-use asset and lease liability as of September 30, 2020:

Right-of-use Asset	$	462,858
Lease Liability
Current	$	14,505
Long-term		448,353
	$	462,858

Net of the elimination of the remaining balances from the first amendment to the lease and the PPP forgivable amount as listed in Note 6, lease expense for the three months ended September 30, 2020 and 2019 was $30,414 and $35,930, respectively, and lease expense for the nine months ended September 30, 2020 and 2019 was $67,770 and $107,790, respectively.

The following table summarizes the Company’s scheduled future minimum lease payments as of September 30, 2020:

Year Ended December 31:
	2020	$	—
	2021		78,649
	2022		106,985
	2023		109,299
	2024		111,612
	2025		113,925
	2026		77,107
	Minimum lease payments		597,577
	Less: imputed interest		(134,719	)
	Present value of minimum lease payments		462,858
	Less: current maturities of lease liability		14,505
	Long-term lease liability	$	448,353