Note

Commitments and Contingencies

We currently operate

one

facility located in the United States and

one

facility located in China. Our corporate offices and primary research facilities are located in Germantown, Maryland, where we lease approximately

1,500

square feet. This lease provides for monthly payments of approximately

$5,600

per month with the term expiring on

December 31, 2018.

2015,

we entered into a lease consisting of approximately

3,100

square feet of research space in San Diego, California. This lease provides for current monthly payments of approximately

$11,600

and expires on

August 31, 2019.

May 2017,

we ceased-use of this property and recognized a loss of approximately

$92,000

representing the present value of the expected remaining net payments due under such lease and the costs to vacate the property. The loss is included in research and development expense on our statements of operations for the year ended

December 31, 2017.

We are currently exploring opportunities to sub-lease the unused research space.

We also lease a research facility in People’s Republic of China. This lease expires on

September 30, 2018

with lease payments of approximately

$3,200

per month.

Future minimum payments under all leases at

December 31, 2017

are as follows:

Year	Amount
2018		240,000
2019		97,000
2020		-
2021		-
2022 and thereafter		-
Total minimum payments	$	337,000

The Company recognized approximately

$161,000

and

$243,000,

in rent expense for the years ended

December 31, 2017

and

2016,

respectively.

From time to time, we are parties to legal proceedings that we believe to be ordinary, routine litigation incidental to the business. We are currently

not

a party to any litigation or legal proceeding.

The Company is currently obligated under

two

written employment agreements and a general release agreement. The employment agreements are with our: (i) Chief Executive Officer and (ii) Chief Scientific Officer (“CSO”). Pursuant to the terms of the agreements, our CEO and CSO receive annual salaries of

$410,000

and

$500,000,

respectively. The agreements also provide for the payment of severance in the event

one

of the executives is terminated in certain circumstances and also provide for the acceleration of vesting with regard to outstanding equity awards.

April 30, 2017,

we entered into a separation agreement and release (“Agreement”) with our former Chief Financial Officer. Pursuant to the Agreement, the Company will pay an aggregate of

$315,000

payable in

twelve

equal monthly installments. At

December 31, 2017,

$105,000

of payments remain outstanding.