The Company leases an square foot facility at Winnetka Avenue North, Brooklyn Park, Minnesota consisting of our corporate offices, manufacturing and warehouse space. The lease term is years and months, ending on Upon proper notice and payment of a termination fee of approximately the Company has a -time option to terminate the lease effective as of the last day of the year of the term after the Company commenced paying base rent. The renewal and termination options have been included within the lease term because it is reasonably certain that the Company will exercise either option.

 

On the Company entered into an indirect lease arrangement for its original square foot manufacturing facility in Tijuana, Mexico. The Company had previously been leasing this facility on a month to month basis after its -year lease expired on The new lease term is years. This lease contains a written option to renew and rent payments that increase annually based on U.S. inflation for the preceding months.

 

On the Company entered into an indirect lease arrangement for an additional square foot manufacturing facility in Tijuana, Mexico. The lease term is approximately months and commenced on The lease contains written options to renew for additional consecutive periods of years each.

 

Right-of-use lease assets and lease liabilities are recognized as of the commencement date based on the present value of the remaining lease payments over the lease term which includes renewal periods the Company is reasonably certain to exercise. The Company's leases do contain any material residual value guarantees or material restrictive covenants. As of the Company does have material lease commitments that have commenced.

 

Operating lease expense included within cost of goods sold and selling, general and administrative expense was as follows for the and months ended

 

		Three Months Ended March 31,								Six Months Ended March 31,
Operating lease expense within:		2021				2020				2021				2020
Cost of sales		$	252,459			$	218,874			$	505,395			$	404,502
Selling, general and administrative			55,335				55,398				110,733				111,764
Total lease expense		$	307,794			$	274,272			$	616,128			$	516,266

 

Future maturities of lease liabilities were as follows as of

 

FY2021		$	485,717
FY2022			986,844
FY2023			943,682
FY2024			516,725
FY2025			217,552
Thereafter			-
Total lease payments			3,150,520
Less: Interest			(182,281	)
Present value of lease liabilities		$	2,968,239

 

The weighted average term and weighted average discount rate for the Company's leases as of were years and respectively, compared to years and respectively, as of For the and months ended the operating cash outflows from the Company's leases was and respectively, compared to and for the and months ended respectively.