RIGHT OF USE ASSETS AND LEASE LIABILITIES - OPERATING LEASES

3 Months Ended

Mar. 31, 2021

6. RIGHT OF USE ASSETS AND LEASE LIABILITIES – OPERATING LEASES

The Company has operating leases for offices, warehouses, vehicles, and office equipment. The Company’s leases have remaining lease terms of 1 year to 3 years, some of which include options to extend.

The Company’s lease expense for the three months ended March 31, 2021 and 2020 was entirely comprised of operating leases and amounted to $26,855 and $53,628, respectively. The Company’s ROU asset amortization for the three months ended March 31, 2021 and 2020 was $22,929 and $49,949, respectively. The difference between the lease expense and the associated ROU asset amortization consists of interest.

Right of use assets – operating leases are summarized below:

	March 31, 2021		December 31, 2020
	(unaudited)
Office	$	177,276	$	186,302
Warehouse equipment		20,041		12,695
Office equipment		479		1,812
Vehicles		43,826		45,928
Right of use assets - operating leases, net	$	241,622	$	246,737

Operating lease liabilities are summarized below:

	March 31, 2021			December 31, 2020
	(unaudited)
Office	$	177,276		$	186,302
Warehouse equipment		20,041			12,695
Office equipment		479			1,812
Vehicles		43,826			45,928
Lease liability	$	241,622		$	246,737
Less: current portion		(86,284	)		(87,375	)
Lease liability, non-current	$	155,338		$	159,362

Maturity analysis under these lease agreements are as follows:

For the period ended March 31, 2022	$	99,390
For the period ended March 31, 2023		62,824
For the period ended March 31, 2024		58,611
For the period ended March 31, 2025		49,522
Total	$	270,347
Less: Present value discount		(28,725	)
Lease liability	$	241,622