The Company leases its office and warehouse space under a non-cancelable lease agreement accounted for as operating leases. The Company also leases an automobile under a similar non-cancelable lease agreement, which is also accounted for as an operating lease.

Building Lease - Orem, Utah: The Company leases a manufacturing and office facility with 6,000 square feet of space. We lease this facility at $3,692 per month on a lease with an expiration date of November 30, 2020.

Rent expense was $41,258 and $38,967 for the years ended December 31, 2019, and 2018, respectively.

Automobile Lease – The Company currently leases one vehicle with a monthly lease payment of $629 per month. The automobile lease will expire on July 7, 2021.

Automobile lease expense was $7,648 and $7,548 for the years ended December 31, 2019, and 2018, respectively.

Minimum rental payments under the non-cancelable operating leases are as follows:

Years ending December 31,		Amount
2020		48,160
2021		3,774
	$	51,934

A royalty agreement was executed with JMST as a condition of the Company’s acquisitions during 2006. Terms of the royalty agreement are as follows:

JMST – David Carver will receive a royalty payment on gross revenues related to revenues derived from the Carver Patents or Carver Technology. Such payments are due on revenue in excess of $500,000 derived from products under the Carver Patents or Carver Technology. The royalty payment is 2.5% on the revenue in excess of $500,000 and is payable quarterly. Payments are to be made in Reflect Scientific’s common stock not to exceed 500,000 shares in total. New products developed from the Carver Technology are subject to a royalty of 3% of gross revenues in excess of $100,000, with an additional 2% if gross revenues exceed $600,000. Royalties will also be paid in our common stock annually. Common stock will be valued at $3.00 per share for these purposes. Royalty payments are only due for years where there are valid Carver Patents.

As sales did not reach or exceed the triggering threshold, no royalty payments were made under the royalty agreement during 2019 and 2018. In December 2018, management made the decision to remove detectors from their product line due to lack of demand for the product.