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10. COMMITMENTS AND CONTINGENCIES
 3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
NOTE 10. COMMITMENTS AND CONTINGENCIES

Lease Commitments

 

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 $11,427 in rent expense for the quarter ended March 31, 2015.  Approximate minimum annual rents under lease are as follows:

 

Year Ending December 31,   Amount  
2015   $ 38,000  
2016     52,000  
2017     53,000  
2018     4,000  
    $ 147,000