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9. LEASES

12 Months Ended

Dec. 31, 2020

The Company adopted ASU 2016-02, Leases (“Topic 842”) on January 1, 2019 using the modified retrospective approach. The Company has elected not to apply ASC Topic 842 to arrangements with lease terms of 12 months or less. The adoption of the standard resulted in the recognition of a ROU asset and lease liability of $12,900 for one operating lease as of January 1, 2019, with no impact to retained earnings. Prior year amounts have not been restated. That lease is for 1,890 square feet of improved office and warehouse space in Las Vegas, Nevada. In January 2019, the Company recorded an additional $17,101 ROU remeasurement asset and liability from an extension of the facility lease to December 31, 2020. In March 2019, the Company recorded a $57,587 ROU asset and liability for a two-year facility operating lease for 1,906 square feet of improved office and warehouse space in Lake Forest, California expiring in February 2021. In June 2019, the Company recorded a $253,412 ROU asset and liability for a 38-month facility operating lease for 11,256 square feet of improved office, assembly, training and warehouse space in Tempe, Arizona expiring in July 2022.

Amortization of ROU operating lease assets was $121,844 and $80,069 for the years ended December 31, 2020 and 2019, respectively.

Operating lease expense for capitalized operating leases included in operating activities was $137,228 and $94,599 for the years ended December 31, 2020 and 2019, respectively. Operating lease obligations recorded on the balance sheet at December 31, 2020 are:

Operating lease liability- short term	$	94,011
Operating lease liability - long term		56,006
Total Operating Lease Liability	$	150,017

Future lease payments included in the measurement of lease liabilities on the balance sheet at December 31, 2020 for future periods are as follows:

2021		101,406
2022		57,328
Total future minimum lease payments		158,734
Less imputed interest		(8,717	)
Total	$	150,017

The weighted average remaining lease term is 1.54 years and the weighted average discount rate is 7.0%.

The Company did not have any short-term lease expense during the years ended December 31, 2020 and December 31, 2019. The Company does not have any finance leases.