The Company rents office and laboratory space in the United States. The Company also leases office equipment under a non-cancellable equipment lease through December 2022.

In June 2017, the Company entered into a new lease agreement for our new U.S. headquarters that includes 14,141 square foot of office and laboratory facilities under a noncancelable operating lease commencing on November 1, 2017 for an initial lease term of 90 months. The lease requires a security deposit of $34,174 which is recorded as a component of other assets. The lease provides for six months of free rent with the first base rent payment due on May 1, 2018. The base rent is subject to an annual 3% escalation effective on May 1 of each year during lease term. The Company is also required to pay our share of operating expenses billable by the landlord. Aggregate rent over the lease term plus free rent and rent escalation are recognized on a straight-line basis over the lease term with the difference between rent expense and rent payment recorded as deferred rent.

In addition, the lease agreement provided the Company tenant improvement incentives and allowances that include an upfront payment to the Company of $282,820 and $902,051 of additional tenant improvement allowances which were reimbursed by the landlord for construction costs incurred by the Company. The $902,051 of additional tenant improvement allowances added additional monthly rent payments beginning on May 1, 2018, which includes interest at 8.5% per annum. The additional monthly rent payments resulting from additional tenant improvement allowance is not subject to the annual 3% rent escalation applicable to the base rent.

During 2017, construction costs incurred are recorded as construction in progress with a corresponding lease incentive obligation which is classified as a component of deferred rent. The Company has reclassified the total construction costs into leasehold improvements during 2018. The company recorded $115,782 and $29,854 of amortization of lease incentive obligation as a reduction of rent expense for the years ended December 31, 2018 and 2017, respectively.

Rent expense under all of the Company’s operating leases was $632,658 and $562,840 for the years ended December 31, 2018 and 2017, respectively. Deferred rent resulting from rent escalation totaled $182,062 and $82,180 at December 31, 2018 and 2017, respectively.

Future minimum lease payments for non-cancelable operating leases at December 31, 2018 are as follows:

Year ending December 31,
2019	$	386,505
2020		392,779
2021		399,242
2022		405,898
2023		407,054
2024 and thereafter		552,947
Total	$	2,544,425

We are a party in various contractual disputes, litigation, and potential claims arising in the ordinary course of business. We do not believe that the resolution of these matters will have a material adverse effect on our financial position or results of operations.