15.

Commitments

Operating Leases

The Company’s United Kingdom subsidiary maintains a lease for office and warehouse space which expires December 2014 at a cost of $5,000 per month and additional space that expires July 2014 at a cost of $2,000 per month. In September 2012, the Company’s German subsidiary entered into a 3-year lease to rent approximately 3,000 square feet of office and warehouse space in Heusenstamm, Germany at a cost of $2,000 per month. In August 2011, Flexo Universal entered into a 5-year lease to rent 73,000 square feet of warehouse and office space in Guadalajara, Mexico at the cost of $30,000 per month. In September 2012, we entered into a lease agreement, expiring on February 28, 2017 to rent approximately 117,000 square feet of warehouse and office space in Lake Zurich, Illinois at a cost per month as follows:

Lease period	Amount per month
March 1, 2013 – October 31, 2013	$	25,000
November 1, 2013 – October 31, 2014		28,000
November 1, 2014 – October 31, 2015		30,000
November 1, 2015 – October 31, 2016		33,000
November 1, 2016 – February 28, 2017		36,000

All of the Company’s lease payments are recognized on a straight-line basis. The net lease expense was $954,000 and $963,000 for the years ended December 31, 2014 and 2013, respectively.

The future aggregate minimum net lease payments under existing agreements as of December 31, are as follows:

2015	$	854,000
2016		661,000
2017		72,000
Thereafter		-
Total	$	1,587,000

Licenses

The Company has certain merchandising license agreements that require royalty payments based upon the Company’s net sales of the respective products. The agreements call for guaranteed minimum commitments that are determined on a calendar year basis. Future guaranteed commitments due, as computed on a pro rata basis, as of December 31, are as follows:

2015	$	400,000
Thereafter		950,000
Total	$	1,350,000