Leases

12 Months Ended

Dec. 31, 2017

Leases [Abstract]

Leases

7. Leases

The Company leases its office and warehouse facilities in Boynton Beach, Florida under a long-term non-cancellable lease agreement, which contains renewal options and rent escalation clauses. As of December 31, 2014, a security deposit of $34,970 is included in noncurrent assets in the accompanying balance sheet. During 2008, this lease was renewed effective August 1, 2008 and expired on July 31, 2013 and contained an annual increase of 3%. During June 2009, an amendment to the lease agreement was reached, temporarily reducing the monthly rent. The total minimum lease payments over the term of the lease were reduced from an aggregate of approximately $956,000 to approximately $925,000, or approximately 3%. On September 27, 2012 the Company entered into a non-cancellable lease agreement for the same facilities commencing August 1, 2013 and expiring July 31, 2019. The total minimum lease payments over the term of the lease signed on September 27, 2012 amount to $909,383. See Note 11.

The Company leased a condominium in Ocean Ridge, Florida, on an annual basis, to provide accommodations for Company use, primarily for Mr. Alan Sandler and Mr. Kevin Kroger, the Company’s Principal Financial Officer, Vice President and Chief Administrative Officer, and Chief Operating Officer, respectively. The lease has an annual expense of $8,500. In December 2017, the Company did not renew the lease.

Rent expense under all operating leases for the years ended December 31, 2017 and 2016 totaled $280,880 and $268,759, respectively, of which $212,454 and $204,568 is included in cost of products sold and $66,346 and $64,191 is included in selling and administrative costs, respectively, in the accompanying statements of operations.

In January 2012 and August 2011, the Company entered into capital lease obligations for the purchase of $15,383 and $13,681, respectively of office equipment, which is included in property and equipment.  As of December 31, 2017 and 2016 the office equipment was recorded net of $6,008 and $7,198 respectively, of accumulated depreciation, in the accompanying balance sheets.  In January 2015 the Company entered into a new capital lease for office equipment in the amount of $15,020.

Future minimum lease commitments due for facilities and equipment leases under non-cancellable capital and operating leases at December 31, 2017 are as follows:

	Capital Leases		Operating Leases
2018	$	3,443	$	164,448
2019		—		97,586
Total minimum lease payments		3,443	$	262,034
Less amount representing interest		—
Present value of minimum lease payments	$	3,443