4. LEASE

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

LEASE

4.     LEASE

The Company entered into an operating lease for an office space which became effective in June 2020 when the construction was complete and we were given access to occupy the space. The lease term is 10 years from the effective date and allows for two optional extensions of five years each. The two optional extensions are not recognized as part of the right-of-use asset or lease liability since it is not reasonably certain that the Company will extend this lease. As of June 30, 2020, the remaining lease term was 10 years and the discount rate was 6%. The lease for our previous office space was accounted for as a short-term lease.

Operating lease cost included in Selling, general and administrative expenses was $59,889 for the three and six months ended June 30, 2020. Short-term lease cost included in Selling, general and administrative expense was $37,597 and $56,415 for the three months ended June 30, 2020 and 2019, respectively. Short-term lease cost included in Selling, general and administrative expense was $94,906 and $109,229 for the six months ended June 30, 2020 and 2019, respectively

The following is the lease maturity analysis of our z as of June 30, 2020:

Twelve months ending June 30,

2021	$	561,968
2022		571,968
2023		571,968
2024		571,968
2025		577,688
Thereafter		3,149,637
Total lease payments		6,005,197
Less: Imputed interest		1,527,650
Present value of future lease payments		4,477,547
Less: current portion of lease liability		(301,233)
Long-term portion of lease liability	$	4,176,314