In May 2014, the Company entered into a lease for approximately 27,000 square feet of office, laboratory and clean room space to be leased for seventy-two months. The lease required monthly payments of $28,939 adjusted annually by approximately 3% plus triple net expenses monthly of $34,381 adjusted annually. As of June 30, 2018, the Company had a security deposit in place for $187,500 which was held by the landlord and this amount was applied to monthly lease payments for the three months ended December 31, 2018.

 

On March 17, 2017, the Company entered into a sub-lease of approximately 20,000 square feet of office space to be leased for eighty-two months to an unrelated party. The lease required the Company to make monthly payments of $28,425 adjusted annually plus triple net expenses monthly of $28,410 adjusted annually. The Company was also required to make a security deposit of $56,851. On March 17, 2017, the Company sub-leased approximately 10,000 square feet of office space under the May 2014 lease to this unrelated party. The sublease was for eighty-two months and provided for monthly payments to the Company of approximately $25,000. The Company also received a security deposit of $25,046 in connection with this sub-lease. On July 1, 2018 the Company also sub-leased approximately 14,100 square feet of office space, clean room and lab space to other companies. These sub-leases provided for monthly payments of approximately $38,300.

  

On December 14, 2018 the Company entered into surrender agreements with its landlord, sub-landlord and sub-lessees to terminate all remaining lease and sub-lease obligations. In connection with this transaction, the Company was relieved of its remaining obligations under the leases and relinquished its rights under the lease and sublease agreements whereby no cash was exchanged by the parties. Accordingly, the Company recognized a net gain of $167,788. This gain resulted from the elimination of net deferred rent obligations of $199,583 and the sublease security deposit of $25,046 for a total of $224,629; partially offset by forfeiture of the Company’s security deposit for $56,841 to arrive at the net gain of $167,788. Additionally, the Company recognized an impairment charge of $10,163 for the unamortized leasehold improvement costs. As of December 31, 2018, the Company has no remaining lease commitments.

 

 

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of December 31, 2018, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the Company’s results of operations.

At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450,

. Legal fees are expensed as incurred.