OPERATING LEASE RIGHT-OF-USE ASSET / OPERATING LEASE LIABILITY

9 Months Ended

Sep. 30, 2019

NOTE 4. OPERATING LEASE RIGHT-OF-USE ASSET / OPERATING LEASE LIABILITY

On February 1, 2019, we entered into a commercial real estate lease for 3,200 square feet of retail space in Greenvale, NY, with an initial term of two years and, at our option, two additional terms of five years each. Rent is $7,000 per month, as well as our portion of real estate taxes and common area maintenance. We determined the present value of the future lease payments using a discount rate of 8.5%, our incremental borrowing rate based on outstanding debt, resulting in an initial right-of-use asset and lease liability of $154,200, which are being applied ratably over the term of the lease. As of September 30, 2019, the balance of the right-of-use asset and lease liability was $102,800. Future remaining minimum lease payments were as follows:


Year ending December 31,		Amount
2019	$	21,000
2020		84,000
2021		7,000
		112,000
Less: Present value adjustment		(9,200)
Operating lease liability	$	102,800