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Commitments and Contingencies
 3 Months Ended
Mar. 31, 2020
Notes  
Commitments and Contingencies

 

NOTE 7 - COMMITMENTS AND CONTINGENCIES

 

The Company has obligations under both a financing lease and operating lease, as detailed below.

 

Operating Lease Obligations

 

The Company entered into a lease for office space in February 2017 for $950 per month.  In November 2017 the Company signed a six-month extension of the lease with a lease payment of $978 per month. In March 2018 the Company extended the lease agreement through August 31, 2019 at a rate of $1,008 per month.  In July 2019 the Company extended the lease agreement through August 31, 2020 at a rate of $1,038 per month. 

 

Amortization of $3,024 was recorded as rent expense in the first quarter of 2020, leaving an operating right-of-use asset at March 31, 2020 of $5,372 and an operating lease liability of $5,372.  Amortization of $3,021 was recorded as rent expense for the quarter ended March 31, 2019.

 

Obligations under this lease are as follows:

 

 

    2020

    2021

    2022

Office lease

  $    5,372

$           -

$                   -  

 

Upon the adoption of ASC 842, the calculation of our lease obligation using a discount rate of 8% resulted in an immaterial difference and therefore, no interest will be imputed on the lease obligation.

 

In 2018, the Company also entered into a 24-month lease for a nitric oxide analyzer, with a monthly payment of $1,014 per month.  The final payment under this agreement was made in December 2019.

 

Consulting Agreement

 

On March 15, 2020 the Company entered into a service agreement with Hanover International, Inc. to provide advisory services to the Company.  The contract is a one year contract, but may be cancelled with thirty days notice any time after the 91st day of the agreement.  Hanover will receive a fee of $3,500 per month, from which fee it pays all of its expenses.  In addition, Hanover will receive 750,000 shares of restricted common stock, earned in quarterly tranches of 187,500 shares, deemed earned and issuable after services are provided for each quarter. No shares of common stock have been issued under the terms of this agreement as of March 31, 2020.