LEASES

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

LEASES

Note 6 — Leases

Operating Lease Agreements

In July 2016, the Company renewed its lease with an unrelated third party for its headquarters office. The renewal was effective September 1, 2016 and expanded the office space being occupied. The lease expires in September 2022 and lease payments increase by 3% annually. In February 2017 and January 2018, the Company signed amendments to expand further the leased office space. The Company’s Israeli subsidiary entered into a two-year lease for office space starting in September 2018. The leases include an option to extend with prior notice and with terms to be negotiated. The Company currently does not have any lease with a term under 12 months.

On March 19, 2019, the Company’s Israeli subsidiary signed a 10-year lease for a manufacturing facility, effective April 1, for approximately 5,800 square feet. The landlord has provided a four-month grace period rent free from April to July 2019, after which the 10 year lease will begin. The monthly rental payment starts at approximately $5,300 and will be subject to periodic escalations at amounts specified in the lease plus the consumer price index. In addition, the Company is responsible for maintenance fees covering its portion of the expenses of common areas. After 2, 4, 6 and 8 years, and with 180 days prior notice, the Company has the right to terminate the lease at its sole discretion with no penalty.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of March 31, 2019.

Maturity of Operating Lease Liabilities	Amount
2019 (April 1 – December 31, 2019)	$	187,420
2020		245,237
2021		230,674
2022		176,866
Total undiscounted operating leases payments	$	840,197
Less: Imputed interest		(88,441	)
Present Value of Operating Lease Liabilities	$	751,756
Other Information
Weighted-average remaining lease term		3.3 years
Weighted-average discount rate		5.0	%

An initial ROU asset of approximately $805,000 was recognized as a non-cash assets addition with the adoption of the new lease accounting standard. The ROU asset was reduced by approximately $56,000 during the three months ended March 31, 2019. Cash paid for amounts included in the present value of operating lease liabilities was approximately $62,000 for the three months ended March 31, 2019 and is included in operating cash flows. Operating lease cost was approximately $65,000 for the three months ended March 31, 2019.