Note 8 – Leases

The Company adopted Accounting Standards Codification (ASC) Topic 842 on the date of the Merger and recognized an operating right-of-use (ROU) asset of $1.4 million and operating lease liabilities of $1.4 million at upon acquiring the lease in the reverse merger. The Company leased office space in Berkeley Heights, New Jersey that was expected to expire on November 15, 2021 under an operating lease. In addition to the monthly base amount in the lease agreement, the Company is required to pay its proportionate share of real estate taxes and operating expenses during the lease term which are expensed as incurred. The discount rate implicit within the lease is not determinable, therefore Company estimated an incremental borrowing rate based on the information available on the date of the Merger.

On July 8, 2019, the Company entered into a lease termination agreement for its office space located at 300 Connell Drive, Suite 4000, Berkeley Heights, NJ 07922 effective August 31, 2019 (the “Lease Termination Agreement”). Pursuant to the Lease Termination Agreement, the Company was required to pay 50 percent of the remaining lease payments of $665,802 over three installments on September 1, 2019, December 1, 2019, and March 1, 2020, which was recorded as lease termination costs in the third quarter of 2019. On August 31, 2019, the right-of-use asset of $1.2 million and operating lease liability of $1.2 million was written off. Leasehold improvements amounting to approximately $0.3 million were also written off and are included in lease termination costs. The Company entered into a temporary month-to-month lease as of September 1, 2019 for office space located at 830 Morris Turnpike, Short Hills, NJ 07078 until the Company entered into a new lease for permanent office space. This lease was terminated on May 31, 2020.

Effective March 5, 2020, the Company entered into a sublease for approximately 11,200 square feet of office space located at 25B Vreeland Road, Florham Park, NJ. The sublease commenced on May 1, 2020 and will continue for a term of forty (40) months with an option to renew through October 31, 2027. Upon inception of the lease, the Company recognized approximately $0.7 million of a ROU asset and operating lease liabilities. The discount rate used to measure the operating lease liability as of May 1, 2020 was 9.15%. Throughout the period described above the Company has maintained, and continues to maintain, a month-to-month lease for its research facilities at the Princeton Innovation Center BioLabs located at 303A College Road E, Princeton NJ, 08540.

	Year Ended
	December 31, 2020
Cash paid for amounts included in measurement of lease liabilities:

Operating cash outflows for operating lease	$	98,133
Right-of use asset obtained in exchange for new operating lease liability	$	668,764
Remaining lease term - operating lease liability		32.0
Discount rate - operating lease		9.15	%

Reported as of December 31, 2020

Operating lease right-to-use asset	$	547,706

Current portion of operating lease liability	$	119,904
Operating leases, net of current portion		490,353
Total	$	610,257

For the year ended December 31, 2020 the Company’s operating lease expense was $160,685.

Year ended December 31,
2021	$	170,836
2022		295,346
2023		239,469
2024		-
2025 and after		-
Total future minimum lease payments		705,651
Less inputed interest		(95,394	)
	$	610,257