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Commitments and Contingencies
 6 Months Ended
Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
13. Commitments and Contingencies

 

Employment Agreements

 

The Company has entered into employment agreements with three of its key executives. Under their respective agreements, the executives serve at will and are bound by typical confidentiality, non-solicitation and non-competition provisions. Deferred compensation for the founders of the Company, as disclosed in Note 12 above, is still outstanding as of December 31, 2019.

 

Operating Leases

 

On January 1, 2010, the Company entered into an agreement to lease 6,000 rentable square feet of office space in Columbus, Ohio. The lease commenced on January 1, 2010 and, pursuant to a lease extension dated August 9, 2016, the lease expires on December 31, 2021.

 

Our subsidiary, Graphic Sciences, uses 36,000 square feet of leased space in Madison Heights as its main facility. Graphic Sciences uses about 20,000 square feet for its records storage services, with the remainder of the space used for production, sales, and administration. The monthly rental payment is $40,694, with increases annually in September up to $45,828 for the final year, with a lease term continuing until August 31, 2026.

 

Graphic Sciences also leases and uses a separate 20,000 square foot building for document storage in Highland Park, MI, a satellite office in Traverse City, MI for production, and additional temporary storage space in Madison Heights, MI. The monthly Highland Park rental payment is $10,417, with increases annually in September up to $11,250 for the final year, with a lease term continuing until September 30, 2021. The monthly Traverse City rental payment is $4,500, with a lease term continuing until January 31, 2024. The monthly additional Madison Heights rental payment is $6,348, with a lease term continuing until July 31, 2020 and a month-to-month arrangement thereafter.

 

Graphic Sciences also leases and uses four leased vehicles for logistics. The monthly rental payments for these vehicles total $2,618, with lease terms continuing until October 31, 2024.

 

Future minimum lease payments under these operating leases are as follows:

 

For the Twelve Months Ending June 30,   Amount  
2021   $ 793,321  
2022     652,965  
2023     594,690  
2024     575,480  
2025     543,102  
Thereafter     639,798  
    $ 3,799,356  

 

Lease costs charged to operations for the three and six months ended June 30, 2020 and 2019 amounted to $217,570 and $294,620, respectively, and $12,814 and $25,628, respectively. Additional information pertaining to the Company’s lease are as follows:

 

For the Six Months Ending June 30, 2020:      
Operating cash flows from operating leases   $ 176,172  
Weighted average remaining lease term – operating leases     5.6 years  
Weighted average discount rate – operating leases     8.0 %