Note 9 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

9. Commitments and Contingencies

Office Space Rental

The Company leases office and laboratory facilities in Charlottesville, Virginia. On

March 31, 2017,

the Company entered into a lease for its office and laboratory facilities at a new location in Charlottesville, Virginia. During the

three

months ended

June 30, 2017,

the Company capitalized approximately

$0.4

million in leasehold improvements as part of the build out of the new office and laboratory location. Rent expense related to the Company's operating leases for the

three

months ended

June 30, 2017

and

2016

was

$35,500

and

$17,000,

respectively. Rent expense for the

six

months ended

June 30, 2017

and

2016

was

$52,000

and

$33,000,

respectively. For the new operating lease, lease payments commenced on

May 1, 2017

and expire on

April 30, 2022.

The Company will continue to recognize rent expense on a straight-line basis over the lease period and will accrue for rent expense incurred but

not

yet paid. Future minimum rental payments under the Company's new non-cancelable operating lease at

June 

30,

2017

was as follows:

	Rental Commitments
2017	$	55,492
2018		112,354
2019		114,409
2020		116,464
2021		118,519
Thereafter		58,232
Total	$	575,470

Legal Proceedings

On

August 7, 2014,

a complaint was filed in the Superior Court of Los Angeles County, California by Paul Feller, the Company’s former Chief Executive Officer under the caption

Paul Feller v. RestorGenex Corporation, Pro Sports & Entertainment, Inc., ProElite, Inc. and Stratus Media Group, GmbH

(Case

No.

BC553996

). The complaint asserts various causes of action, including, among other things, promissory fraud, negligent misrepresentation, breach of contract, breach of employment agreement, breach of the covenant of good faith and fair dealing, violations of the California Labor Code and common counts. The plaintiff is seeking, among other things, compensatory damages in an undetermined amount, punitive damages, accrued interest and an award of attorneys’ fees and costs. On

December 30, 2014,

the Company filed a petition to compel arbitration and a motion to stay the action. On

April 1, 2015,

the plaintiff filed a petition in opposition to the Company’s petition to compel arbitration and a motion to stay the action. After a hearing for the petition and motion on

April 14, 2015,

the Court granted the Company’s petition to compel arbitration and a motion to stay the action. On

January 8, 2016,

the plaintiff filed an arbitration demand with the American Arbitration Association.

No

arbitration hearing has yet been scheduled. The Company believes this matter is without merit and intends to defend the arbitration vigorously. Because this matter is in an early stage, the Company is unable to predict its outcome and the possible loss or range of loss, if any, associated with its resolution or any potential effect the matter

may

have on the Company’s financial position. Depending on the outcome or resolution of this matter, it could have a material effect on the Company’s financial position.