. Leases

Lessee

We lease certain office facilities, storage, and equipment. These leases have varying terms, are generally

one

five

years in length, and certain real estate leases have options to extend or early terminate. Several of our operating leases are subject to annual changes in the Consumer Price or similar indexes (CPI). The changes to the lease payment due to CPI changes are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred.

The following represents the maturity of our operating lease liabilities as of

December 31, 2019:

2020	$	248,425
2021		74,550
2022		27,013
2023		5,768
2024		-
Thereafter		-
Total operating lease payments		355,756
Less: imputed interest		(15,405	)
Total operating lease liabilities	$	340,351

Operating lease expense:	Year ended
	December 31
	2019
Fixed	$	264,131
Variable		17,361
Short-term		24,500
Total	$	305,992

Rental expense under operating leases, including short-term operating leases was

$305,992

and

$326,724

for the years ended

December 31, 2019

and

2018,

respectively.

As of

December 31, 2019,

our operating leases have a weighted-average remaining lease term of

1.75

years and a weighted-average discount rate of

5.2%.

Cash paid for amounts included in the measurement of operating lease liabilities was approximately

$263,700

for the year ended

December 31, 2019.

Lessor – Other Revenue

Other revenue consists of revenue derived from our leasing a portion of our headquarters building to Nutracom effective

January 1, 2019.

The leased space, encompassing manufacturing, warehouse, and certain office space, is for a term of

seven

years, with a tenant option for an additional

five

-year term. Annual lease amounts range from

$193,000

$410,000

over the

seven

-year term.

We recognize lessor rent revenue on a straight-line basis over the term of the lease. As part of this straight-line methodology, the cumulative rental billings

may

be greater or less than the financial period’s recognized revenue; such timing differences are recognized on the balance sheet as an accrued other liability or an unbilled rent revenue receivable.

Also included in other revenue are billings to the tenant for its share of the facility’s common area costs such as real estate taxes, maintenance, and utilities; totaling approximately

$437,700

for the year ended

December 31, 2019.

These same common area costs plus the tenant’s share of the facilities’ depreciation are recorded as cost of goods sold.

The following table details lessor’s estimated straight-line rent revenue over the remaining

six

-year lease term as compared with fixed rent amounts under the lease agreement.

	Estimated
	Straight-line		Lease Agreement
	Rent Revenue		Fixed Rent

2020	$	345,732	$	192,900
2021		345,732		385,800
2022		345,732		385,800
2023		345,732		385,800
2024		345,732		409,913
Thereafter		345,733		409,912
Total	$	2,074,393	$	2,170,125