8. LEASES

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

LEASES

8. LEASES

The Company evaluates new leases at inception based on the criteria defined in Leases (Topic 842). On September 1, 2020, the Company entered into a new five year operating lease with payments ranging from $52,000 to $58,526. The lease has two one-year options to extend the term of the lease. At this time, it is not reasonably certain that we will extend the term of the lease and therefore the renewal periods have been excluded from the right-of-use (“ROU”) asset. We calculated the present value of the lease payment stream using our effective borrowing rate of 10% and recorded a ROU asset and operating lease liability each of $2,605,032 at September 1, 2020. The ROU asset and the corresponding lease liability are being equally amortized on a straight-line basis over the term of the lease which expires on August 31, 2025.

The tables below show the operating ROU assets and liabilities as of December 31, 2020 and the balances as of March 31, 2021, including the changes during the periods.

	Operating right-of
	use asset
Operating lease ROU asset as of December 31, 2020	$	2,418,503
Less amortization of operating lease ROU asset		(56,502	)
Operating lease ROU asset as of March 31, 2021	$	2,362,001

As of March 31, 2021 and December 31, 2020, the current and non-current portions of the lease liability were recorded to the Balance Sheet as follows:

	March 31,		December 31,
	2021		2020
Operating lease liabilities, current	$	420,456	$	521,006
Operating lease liabilities, noncurrent		1,964,050		1,910,357
Total lease liability	$	2,384,506	$	2,431,363

The future minimum rental commitments for our operating leases reconciled to the lease liability as of March 31, 2021 is as follows:

2021	$	474,240
2022		649,147
2023		668,622
2024		688,680
2025		468,212
Total undiscounted future minimum payments		2,948,901
Less imputed interest		(564,394	)
Total lease liability	$	2,384,506