Lease

3 Months Ended

Mar. 31, 2022

Lease

Lease

Note 10. Lease

Beginning on August 1, 2016, the Company leases its headquarters facility under an operating lease agreement that expires on June 30, 2022. Rent expense is $80,000 annually during the first year of the lease term and increases by 1.5% annually thereafter.

Supplemental balance sheet information related to the lease on March 31, 2022 and December 31, 2021 is as follows:

		March 31,		December 31,
Description	Classification	2022		2021
Right of Use Asset – Lease, net	Other assets (non-current)	$	20,903	$	41,490
Operating Lease liability – Short-term	Accrued liabilities		21,332		42,347
Operating Lease liability – Long-term	Other long-term liabilities		0		0
Total operating lease liability		$	21,332	$	42,347

Discount rate – operating lease 6.0%

A new lease agreement at the existing headquarters location will commence on June 1, 2022. The term of the agreement is for a period of 84 months. The first year’s rent will be $118,487 and will increase by 2% annually thereafter.