10. Commitments & Contingencies

12 Months Ended

Dec. 31, 2014

Notes to Financial Statements

Commitments & Contingencies

Leases

On August 19, 2014 we signed an amendment to our lease agreement, which expanded the premises leased by the Company from the landlord from approximately 26,000 to approximately 30,000 rentable square feet. The term of the lease continues until July 31, 2021 with two options to extend the term of the lease, each of which is for an additional period of five years, with the first extension term commencing, if at all, on August 1, 2021, and the second extension term commencing, if at all, immediately following the expiration of the first extension term. In accordance with the amended lease agreement, our monthly base rent increased to approximately $59,700 effective January 1, 2015, with scheduled annual increases each August and again in October for the most recent amendment. The Company is also required to pay an amount equal to the Company’s proportionate share of certain taxes and operating expenses.

The following is a schedule of future minimum lease payments required under the facility leases as of December 31, 2014:

Year Ending
December 31
2015	$	662,000
2016		676,000
2017		690,000
2018		704,000
2019		718,000
Thereafter		1,166,000
Total	$	4,616,000

Rental expense for this facility lease for the years ended December 31, 2014 and 2013 totaled $728,086 and $625,131, respectively.  These amounts include the Company’s proportionate share of property taxes and other operating expenses as defined by the lease.

Employment agreements

We have employment agreements with the Chief Executive Officer, Chief Financial Officer, Chief Technology Officer, Chief Operating Officer, Vice President, Marketing and Vice President, Global Sales. None of these employment agreements is for a definitive period, but rather each will continue indefinitely until terminated in accordance with its terms. The agreements provide for a base annual salary, payable in monthly (or shorter) installments.  In addition, the agreement with the Chief Executive Officer provides for incentive bonuses at the discretion of the Board of Directors. Under certain conditions and for certain of these officers, we may be required to pay additional amounts upon terminating the officer or upon the officer resigning for good reason.

biologistex

Our agreement to form the biologistex joint venture requires us to make an initial capital contribution of $2.4 million. As of December 31, 2014 the remaining capital contribution commitment is $2.4 million. In addition, we agreed to pay SAVSU $1 million in consideration of SAVSU’s participation in biologistex. As of December 31, 2014, we have recorded $0.3 million related to this commitment. If certain performance requirements are met, these payments to SAVSU will be made in monthly increments for twelve months. In addition, biologistex is required to purchase approximately $2.6 million in Smart Containers from SAVSU. See “Note 1. Organization and Significant Accounting Policies – Recent Developments – biologistex Joint Venture” for more information.

Litigation

From time to time, the Company is subject to various legal proceedings that arise in the ordinary course of business, none of which are currently material to the Company's business.