NOTE 4 COMMITMENTS AND CONTINGENCIES The Company entered into a 5-year lease of manufacturing equipment in May 2014. The lease is classified as a capital lease and the asset, valued at $38,890, is included in the furniture, fixtures and equipment amount in Note 2  Property and Equipment as of May 31, 2017 and 2016. The future minimum lease payments under the capital lease for each of the years ending May 31 are as follows: Year ending May 31, 2018 $ 7,618 2019 11,713 2020 0 2021 0 2022 0 Thereafter 0 Total minimum lease payments 19,331 Less: amount representing interest (2,073 ) Present value of minimum lease payments (1) $ 17,258 (1) Reflected in other accrued liabilities on the balance sheet as of May 31, 2017 and 2016. The Company leases certain facilities and equipment to support operations under non-cancelable operating leases and other contractual obligations. Total lease expense under operating leases for the years ended May 31, 2017, 2016 and 2015 amounted to $47,695, $73,688 and $59,481, respectively. The future minimum commitments under operating leases for each of the years ending May 31 are as follows: Year ending May 31, 2018 $ 45,055 2019 44,237 2020 44,237 2021 5,370 2022 0 Thereafter 0 In a transaction related to the acquisition of Schmitt Measurement Systems, Inc., formerly TMA Technologies, Inc. (TMA), the Company established a royalty pool and vested in each shareholder and debt holder of the acquired company an interest in the royalty pool equal to the amount invested or loaned including interest payable through March 1995. The royalty pool is funded at 5% of net sales (defined as gross sales less returns, allowances and sales commissions) of the Companys surface measurement products and future derivative products developed by Schmitt Industries, Inc., which utilize these technologies. As part of the royalty pool agreement, each former shareholder and debt holder released TMA from any claims with regard to the acquisition except their rights to future royalties. Royalty expense applicable