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Commitments and Contingent Liabilities
9 Months Ended
Sep. 30, 2011
Commitments and Contingent Liabilities
8. Commitments and Contingent Liabilities

Operating Leases

The Company occupied approximately 16,000 square feet of office and storage space under Commercial Sublease Agreement with Masters Healthcare, LLC, (a former related party – see Note 9) which expired on March 31, 2011. From April 1, 2011 through June 30, 2011, the lease had been in effect on a month to month basis, with a monthly lease rate of $14,125, pursuant to the provision of the sub-lease.

On June 15, 2011, the Company entered into a lease agreement for approximately 28,000 square feet of office and storage space with an entity effective July 1, 2011. On August 29, 2011, the Company amended the agreement to expand to approximately 62,600 square feet of office and storage space effective November 1, 2011. The amended monthly lease rate of $9,224 is in effect from January 2012 through December 2013. The Company accounts for rent expense using the straight line method of accounting, deferring the difference between actual rent due and the straight line amount. Deferred rent payable was $13,276, and has been included in accrued expenses and other current liabilities on the condensed consolidated balance sheet as of September 30, 2011.

Future minimum payments, by year and in the aggregate, under operating leases as of September 30, 2011 are as follows:

For year ending December 31
  
Amount
  
       
2011
   $ -  
2012
     110,694  
2013
     110,694  
2014
     128,049  
2015
     128,049  
Thereafter
     143,700  
         
Total future minimum lease payments
   $ 621,186  

During the three months ended September 30, 2011 and 2010, the Company recorded rent expense of $19,907 and $50,447, respectively, and for the nine months ended September 30, 2011 and 2010, $114,347 and $71,447, respectively.
 
Litigation

From time to time, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Currently, the Company is not involved in any such matters.