Note 6 - Leases

3 Months Ended

Mar. 31, 2019

Notes

Note 6 - Leases

NOTE 6 - LEASES

The Company leases its facilities from a port authority for $5,639 per month for three years, expiring in September 2020, with annual increases based upon the Consumer Price Index.

The original lease was effective October 1, 2014 and contained a three-year renewal option and a provision for an annual increase of 2% per year, plus Leasehold Tax of 12.84%.  On September 5, 2017, the Company exercised the three year option. The first year of this option was not subject to the 2% increase. The current lease does not contain the option to extend the lease.  However, the Company believes that a new lease agreement will be signed prior to the expiration of the current lease. At March 31, 2020, the remaining lease term is 6 months.

For the three month periods ended March 31, 2020 and 2019, lease expense of $16,918 and $16,627, respectively, are included in the following expense classifications on the statements of operations:

	2020			2019
	Cost of sales	Operating expenses	Total	Cost of sales	Operating expenses	Total
Base rent pursuant to lease agreement	$ 2,998	$   11,995	$ 14,993	$ 2,947	$   11,788	$ 14,735
Variable lease costs	385	1,540	1,925	378	1,514	1,892
Total lease costs	$ 3,383	$   13,535	$ 16,918	$ 3,325	$   13,302	$ 16,627

As of March 31, 2020, total future lease payments are as follows:

For the 12 months ended March 31, 2021
2020	$	29,987
Total		29,987
Less imputed interest		(3,559)
Net lease liability		26,428
Current portion		26,428
Long-term portion	$	-