Note 7 — Lease

In March 2021, the Company entered into a lease agreement for 4,070 square feet of office and laboratory space located in Austin, Texas. The commencement of the lease occurred on June 1, 2021 and the initial term of the lease was 63 months. The actual base rent in the first year of the lease was $56,471 and was net of $18,824 in abated rent over the first three months of the lease term. The annual base rent in the second year of the lease is $77,330 and increases by $2,035 in each succeeding year of the lease. In addition, the Company is required to pay its proportionate share of operating costs for the building under this triple net lease. The lease contains a 5-year fair market renewal option. It does not contain a termination option. The Company recognized a right of use asset of $339,882 and a corresponding lease liability for this lease upon lease commencement.

For purposes of calculating the right of use asset and lease liability included in the Company’s financial statements, the Company estimated its incremental borrowing rate at 6% per annum.

Future minimum payments under the lease are as follows:

For the year ended December 31, 2023, operating cash outflows for lease payments totaled $78,517 and the operating lease cost, recognized on a straight-line basis, totaled $76,070. For the year ended December 31, 2022, operating cash outflows for lease payments totaled $76,482 and the operating lease cost, recognized on a straight-line basis, totaled $76,070. At December 31, 2023, the remaining lease term was 32 months.