LEASE ARRANGEMENTS

12 Months Ended

Sep. 30, 2015

6. LEASE ARRANGEMENTS

The total amount of equipment capitalized under capital lease obligations as of September 30, 2015 and 2014 was $5,892 and $5,892, respectively. Accumulated amortization on capital leases at September 30, 2015 and 2014 was $5,623 and $5,358, respectively. Amortization of assets acquired through capital leases is included in depreciation expense.

In fiscal 2014, we had one new capital lease addition of $114 for laboratory equipment at our Evansville facility. Due to restructuring activities outlined in Note 12, we terminated a capital lease for laboratory equipment in the UK. The activity resulted in a liability reduction of $322. Future minimum lease payments on capital leases at September 30, 2015 for the next five years are as follows:

	Principal		Interest		Total

2016	$	230	$	12	$	242
2017		27		4		31
2018		25		2		27
2019		16		0		16
2020		-		-		-
	$	298	$	18	$	316

We lease office space and equipment under non-cancelable operating leases that terminate at various dates through 2019. Certain of these leases contain renewal options. The UK building lease expires in 2023 but includes an opt out provision after 7 years, which occurred in our fourth fiscal quarter of 2015 and was exercised. Total rental expense under these leases was $82 and $87 in fiscal 2015 and 2014, respectively.

Future minimum lease payments, exclusive of rent related to the UK restructuring discussed in Note 12, for the following fiscal years under operating leases at September 30, 2015 are as follows:

2016	$	24
2017		13
2018		5
2019		4
2020		3
	$	49

We lease a portion of our headquarters’ building in West Lafayette, Indiana to Cook Biotech, Inc. (Tenant) as part of the Lease Agreement signed earlier this fiscal year. The Lease Agreement has an initial term ending December 31, 2024 with escalating rents each year. The Tenant took full possession of the space on May 1, 2015. We recognize the escalating rents on a straight-line basis as a reduction to general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss) and other accounts receivable on the Consolidated Balance Sheets. The cash rent received is recorded to the customer account and as a reduction to the other accounts receivable on the Consolidated Balance Sheets. The variance between the straight line rents recognized and the actual cash rents received will net to zero in other accounts receivable by the end of the agreement on December 31, 2024. As of September 30, 2015, the rents recognized amounted to $350 and cash rent received amounted to $335. Future rental income recognized and cash rents received for the next five years are as follows:

	Straight line rents to be recognized		Cash rent to be received

2016	$	636	$	600
2017		636		600
2018		636		609
2019		636		621
2020		636		633
	$	3,180	$	3,063