15 .	Commitments

Operating Leases

August 2015,

he Company’s United Kingdom subsidiary entered into a

-year lease agreement to rent approximately

9,000

square feet of warehouse and office space in Rugby, England for

$6,000

per month.

November 2016,

CTI Europe entered into a lease agreement for

13,000

square feet of office and warehouse space in Heusenstamm, Germany for a term commencing on

February 1, 2017

and ending on

February 1, 2022

at the rate per month of

$9,000.

A prior lease for space in Heusenstamm was terminated on

February 1, 2017.

August 2011,

Flexo Universal entered into a

-year lease to rent

73,000

square feet of warehouse and office space in Guadalajara, Mexico at the cost of

$22,000

per month. The lease was extended to

February 28, 2017.

Effective

March 1, 2017,

Flexo Universal entered into a

five

year lease for these premises at a cost of

493,090

Mexican Pesos per month (approximately

$26,000

per month).

September 2012,

we entered into a lease agreement, expiring on

February 28, 2017

to rent approximately

118,000

square feet of warehouse and office space in Lake Zurich, Illinois. Effective

March 1, 2017,

this lease has been renewed for

three

years, at a basic rental cost per month of:

Lease period			Amount per month
March 1, 2017	–	February 28, 2018	$	38,000
March 1, 2018	–	February 28, 2019	$	40,000
March 1, 2019	–	February 29, 2020	$	42,000

All of the Company

’s lease payments are recognized on a straight-line basis. The net lease expense was approximately

$1.4

million for the years ended

December 31, 2017

and

2016,

respectively.

The future aggregate minimum net lease payments under existing agreements as of

December 31

are as follows:

		Total
201 8		1,443,000
2019		1,427,000
2020		947,000
2021		805,000
2022+		201,000
Total	$	4,823,000

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:

2018		500,000
2019		500,000
Total	$	1,000,000