8. COMMITMENTS Operating Leases On December 1 st , 2016, the Company entered into a one-year, renewable lease for combined warehouse and office space. The lease was renewed in January 2018 for an additional one-year term. The monthly lease payment is $2,247. The Company rents production equipment from its majority member. The leases have five-year terms and are renewable. The start dates and monthly rents are: Lease start date Monthly rent Equipment lease #1 January 1, 2016 $ 150 Equipment lease #2 July 1, 2017 100 Equipment lease #3 November 1, 2017 100 Future minimum annual lease obligations on long term operating leases are: Twelve months ending June 30, 2019 $ 4,200 June 30, 2020 4,200 June 30, 2021 3,300 June 30, 2022 2,400 June 30, 2023 400 The Company has an informal agreement for refrigerated storage with an unrelated party. Rent expense for the six months ended June 30, 2018 and 2017 was $14,085 and $13,572, respectively included under operating expenses and $2,247 and $963, respectively included in cost of goods sold. Patent License Agreement On February 27, 2018, the Company entered into a Patent License agreement (the License) with its majority shareholder (Licensor). The License is effective for the duration of the patent in exchange for payments of $1,000,000 per year. Payment can be made in cash or stock. The terms of the License are controlled at the sole discretion of the Licensor. Patent license fees for the six months ended June 30, 2018 were $400,000.