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Commitments and Contingencies
12 Months Ended
Dec. 31, 2021
Commitments And Contingencies Disclosure Abstract  
Note 6. Commitments and Contingencies

Note 7. Commitments and Contingencies

 

The Company leases approximately 1,000 square feet of office space in Austin, Texas. The Company extended the office space lease from October 1, 2020 through September 30, 2021 for a rental rate of $1,850 per month.  On March 28, 2022, the Company entered into a new lease agreement for the office space, which has a term of 24 months, through March 31, 2024, and a monthly rental cost of $1,515 for the period from April 1, 2022 to March 31, 2023 and $1,560 per month from April 1, 2023 to March 31, 2024, together with costs and expenses of approximately $725 per month for 2022. Lease expense was $23,413 and $21,405 for the years ended December 31, 2021 and 2020, respectively.

 

On December 21, 2018, a former client, Brian Moats filed an Original Petition naming Reliant Pools as a defendant in a suit filed in the County Court at Law No. 2 for Travis County, Texas (Cause No. C-1-CV-18-012062). The suit alleged that the Company failed to install a French drain under the pool as required by the terms of the contract, alleged causes of action of breach of express warranty and breach of contract and sought damages of between $100,000 and $200,000. We denied Mr. Moats’ claims. In October 2020, Reliant Pools entered into a memorandum setting forth the proposed terms of a settlement with Mr. Moats. The settlement agreement terms provide for Reliant Pools to pay Mr. Moats an aggregate of $145,000 (with $40,000 paid on October 30, 2020, $25,000 paid on December 4, 2020, and additional tranches of funds due from January 1, 2021 to March 1, 2022); the entry into an agreed judgment (which may be plead by Mr. Moats if we default in any payment); the provision of a security interest over our accounts receivable to secure amounts due to Mr. Moats; a non-suit of the lawsuit and our agreement to honor a prior warranty on Mr. Moats’ pool.

 

During the year ended December 31, 2021, the Company paid Mr. Moats $65,000, pursuant to the settlement agreement, leaving $15,000 in accrued liabilities related to the above pending lawsuit with Mr. Moats.