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Commitments
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6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2014
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| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Text Block] |
Note 5 – Commitments
Lease
On March 24, 2014, the Company entered into a lease for 14,782 square feet of office and laboratory space located in Austin, Texas. The triple net lease has a term of 48 months and commenced on June 1, 2014. The annual base rent in the first year of the lease is $154,324 and increases by $3,548 in each succeeding year of the lease. In addition, the Company is required to pay its proportionate share of operating costs for the building. The Company has a one-time option to terminate the lease on May 31, 2017 with a termination payment of approximately $99,000 if it elects to exercise this option. Upon entering the lease agreement, the Company paid the landlord a security deposit of $35,840 that is to be repaid, provided the Company is not in default on any of its obligations under the lease, one-half after eighteen months and the remainder at the end of the lease term. At June 30, 2014, the remaining annual base rent commitments under the lease, assuming no early termination, are as follows:
The Company leased its prior facility in Spicewood, Texas under an operating lease that expired on June 26, 2014. Rent expense incurred for the six months ended June 30, 2014 and 2013 amounted to $36,773 and $17,631, respectively. Rent expense incurred for the three months ended June 30, 2014 and 2013 amounted to $26,886 and $8,412, respectively. Inventory
The Company’s contract manufacturer, as pre-approved by the Company, purchases component inventory to utilize in future production of the Company’s products. If the Company were to cease utilizing this contract manufacturer, the Company would be required to purchase the inventory acquired on its behalf and not used in the production of its products at the acquisition cost of the inventory plus a storage fee. At June 30, 2014, the Company’s contract manufacturer held component inventory of $71,598, inclusive of the storage fee, under this arrangement. The Company has recorded this component inventory as inventory in its balance sheet with a corresponding liability recorded in accrued expenses. |
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