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Certain Relationships and Related Transactions
6 Months Ended
Jun. 30, 2019
Related Party Transactions [Abstract]  
Certain Relationships and Related Transactions

15. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

In October 2018, the Company entered into an office lease covering approximately 7,250 square feet of rental space in the building located at 40 West 57th Street in New York City. The lease is for a term of three years. The annual lease rate is $60 per square foot. Initially the Company will occupy and pay for only 3,275 square feet of space, and the Company is not obligated under the lease to pay for the remaining 3,975 square feet covered by the lease unless we elect to occupy that additional space. The Company believes the terms of the lease are very favorable to us, and the Company obtained these favorable terms through the assistance of Peter A. Cohen, a director, which he provided so that the company he owns, Peter A. Cohen, LLC (“Cohen LLC”), could sublease a portion of the office space.

 

The Company is using 1,648 square feet, and Cohen LLC is using approximately 4,584 square feet as of June 30, 2019. The monthly lease payment for 6,232 square feet is $31,160. Of this amount $22,920 is allocated pro rata to Cohen LLC based on square footage occupied. Additional lease charges for operating expenses and taxes are allocated under the sublease based on the ratio of rent paid by the Company and Cohen LLC to total rent. Once the space is fully occupied, the Company will reduce the overall annual lease rate for the Cohen LLC space to $58.60 per square foot. The Company recognized $51,000 and $126,000 of sublease income related to this agreement for the three and six months ended June 30, 2019, respectively. The sublease income is included in other income, net in the statement of operations. As of June 30, 2019 and December 31, 2018, there was $102,000 and $0 due from the related party under this agreement.