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9. COMMITMENTS AND CONTINGENCIES
 3 Months Ended
Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]  
NOTE 9. COMMITMENTS AND CONTINGENCIES

Lease Commitments

 

In September 2014, we entered into a lease agreement for office and warehouse space in Frederick, Maryland. As part of the lease agreement, we received a rent holiday in the first 5 months of the lease. The lease also provides for an escalation clause pursuant to which 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 three months ended March 31, 2017 and 2016, respectively. Approximate minimum annual rents under the lease are as follows:

 

Twelve Month Period Ending March 31,   Amount  
       
       
2018   $ 45,000  
    $ 45,000  

 

Legal Contingencies 

 

We may become a party to litigation in the normal course of business.  In the opinion of management, there are no legal matters involving us that would have a material adverse effect upon our financial condition, results of operations or cash flows. In addition, from time to time, we may have to file claims against parties that infringe on our intellectual property.

 

Product Liability

 

As of March 31, 2017 and December 31, 2016, there were no claims against us for product liability.