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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies |
13. | Commitments and Contingencies
From time to time the Company is involved in legal proceedings, claims and litigation related to employee claims, contractual disputes and taxes in the ordinary course of business. Although the Company cannot predict the outcome of such matters, currently the Company has no reason to believe the disposition of any current matter could reasonably be expected to have a material adverse impact on the Company’s financial position, results of operations or the ability to carry on any of its business activities. 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 a founder of the Company, as disclosed in Note 12 above, is still outstanding as of December 31, 2020 and 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. The Company is currently evaluating its renewal options. 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 $41,508, 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, and a satellite office in Traverse City, MI for production. The monthly Highland Park rental payment is $11,250, 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. 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. Graphic Sciences also leases and uses additional temporary storage space in Madison Heights, MI. This Madison Heights temporary storage space monthly rental payment is $12,500, with a lease term on a month-to-month basis. The Company has made an accounting policy election to not record a right-of-use asset and lease liability for short-term leases, which are defined as leases with a lease term of 12 months or less. Instead, the lease payments are recognized as rent expense in the general and administrative expenses on the statement of operations. Future minimum lease payments under these operating leases are as follows:
For the Twelve Months Ending December 31, |  | Amount |
2021 |  | $ | 840,812 |
2022 |  |  | 617,255 |
2023 |  |  | 617,085 |
2024 |  |  | 550,878 |
2025 |  |  | 542,750 |
Thereafter |  |  | 366,626 |
|  | $ | 3,535,406 |
Lease costs charged to operations for the twelve months ended December 31, 2020 and 2019 amounted to $743,373 and $51,254, respectively. Included in the lease costs for the twelve months ended December 31, 2020 was short-term lease costs of $71,411. Additional information pertaining to the Company’s lease are as follows:
For the Twelve Months Ending December 31, 2020: |  |  |
Operating cash flows from operating leases |  | $ | 482,425 |
Weighted average remaining lease term – operating leases |  |  | 5.1 years |
Weighted average discount rate – operating leases |  |  | 7.96 | %
As the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

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