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10. COMMITMENTS AND CONTINGENCIES
 12 Months Ended
Dec. 31, 2014
Notes to Financial Statements  
NOTE 10. COMMITMENTS AND CONTINGENCIES

Lease Commitments

 

The Company leased 1,611 square feet of office/warehouse space in San Diego, CA for research and development purposes. The lease payments amounted to approximately $2,000 per month. This lease expired in May of 2014 and the Company continued to rent the space on a month-to-month basis. The Company vacated the office/warehouse in July of 2014 and has moved the lab to its new facility in Fredrick, Maryland.

 

In September of 2014 the Company entered into a lease agreement for office and warehouse space in Fredrick Maryland. As part of the lease agreement, the Company is to receive a rent holiday in the first 5 months of the lease. The lease also provides for an escalation clause where the Company will be subject to an annual rent increase of 3%, year over year. The lease expires on January 31, 2018. The Company accounts for the lease using the straight line method and recorded $15,236 in rent expense for the year ended December 31, 2014. Approximate minimum annual rents under lease are as follows:

 

Year Ending December 31,   Amount
2015   $ 42,000
2016    52,000
2017    53,000
2018      4,000
    $151,000