Right-of-Use Assets and Lease Liability
|3 Months Ended|
Mar. 31, 2021
|Right-of-Use Assets and Lease Liability||
Note 5 – Right-of-Use Assets and Lease Liability
On September 20, 2017, the Company renewed its operating lease for its manufacturing facility in Irvine, California, effective October 1, 2017, for five years with an option to extend the lease for an additional five years at the end of the initial lease term. The initial lease rate was $26,838 per month with escalating payments. In connection with the lease, the Company is obligated to pay $7,254 monthly for operating expenses for building repairs and maintenance. The Company has no other operating or financing leases with terms greater than 12 months.
The Company accounts for this lease following the guidance in ASC Topic 842, Leases, and elected to adopt the short-term lease exception and not apply Topic 842 to arrangements with lease terms of 12 months or less. The Company determined the lease liabilities using the Company’s estimated incremental borrowing rate of 8.5% to estimate the present value of the monthly lease payments.
Our operating lease cost is as follows:
Supplemental cash flow information related to our operating lease is as follows:
Maturity of our lease liabilities by fiscal year for our operating lease is as follows:
The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef