Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 13 - Commitments and Contingencies

Operating leases

We lease our office space in New Providence, New Jersey pursuant to a three-year lease agreement for monthly lease payments of approximately $3,700.  These premises serve as our corporate headquarters. The lease is currently in its second one-year extension which expires on October 31, 2014.  Facility rent expense totaled approximately $11,100 and $11,300 for the three months ended September 30, 2013 and 2012, respectively, and for the nine months ended September 30, 2013 and 2012 totaled approximately $33,100 and $33,900, respectively.

Royalty Agreements

In February 2007, we acquired an exclusive, royalty-bearing license in specific but broad global territories to make, have made, use, sell, offer for sale, modify, develop, import, and export products made using patent applications owned by Rutgers. We are using these patented technologies in the production of our composite rail ties and structural building products. The term of the license agreement with Rutgers runs until the expiration of the last-to-expire issued patent within the Rutgers’ technologies licensed under this license agreement, unless terminated earlier.

We are obligated to pay Rutgers royalties ranging from 1.5% to 3.0% on various product sales, subject to certain minimum payments each year and to reimburse Rutgers for certain patent defense costs in the case of patent infringement claims made against the Rutgers patents.  For the three months ended September 30, 2013 and 2012, we accrued royalties payable to Rutgers on product sales of $19,195 and $13,200, respectively. In addition, for the three months ended September 30, 2013 and 2012, since we did not meet the minimum royalty due pursuant to the license, we accrued $30,805 and $66,800, respectively which was charged to operating expenses in our statement of operations. We also pay annual membership dues to Rutgers Center for Advanced Materials via Immiscible Polymer Processing, or AMIPP, a department of Rutgers.  The membership allows us to use AMIPP for basic research and development at no additional cost, with access to more comprehensive R&D services available to us for fees determined on a per-project basis.