Commitments and Contingencies
|12 Months Ended|
Dec. 31, 2017
|Notes to Financial Statements|
|Note 7. Commitments and Contingencies||
On December 22, 2015 we entered into a lease for new office space for a 12-month term, with a monthly rent payment of approximately $6,500 per month plus additional charges. This lease was renewed for an additional one-year term in December 2017.
On December 17, 2015 we entered into a sublease agreement for our former office space with a third party with a lease term starting January 1, 2016 to February 28, 2018. The average monthly rent to be received under this sub-lease is approximately $15,000 per month, over the sub-lease term.
At December 31, 2017 and 2016, the long-term portion of deferred lease abandonment liability was approximately $0 and $28,000, respectively, and the short-term portion of deferred lease abandonment liability of approximately $65,000 and $169,000 was included in accounts payable and accrued liabilities at December 31, 2017 and 2016, respectively.
We have a standard indemnification arrangement under this sublease agreement that require us to indemnify the sublessee against liabilities and claims incurred in connection with the premises covered by the Companys lease. The term of this indemnification agreement is from the time of execution of the agreement to its expiration. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is $75,000, which is covered by a letter of credit that is outstanding as of December 31, 2016. As of December 31, 2017, the Company had not accrued a liability for this indemnification because the likelihood of incurring a payment obligation in connection with this indemnification is remote.
The future minimum lease payments required under the non-cancelable operating leases are as follows (rounded in millions):
In September 2017, we were notified by the sublease tenant that as of October 2017, due to their weak financial condition, they would no longer be able to make the required monthly sublease payments over the remaining term of the sublease. Accordingly, we recognized an abandonment loss of approximately $38,000, included in general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2017.
A former Chief Financial Officer of the Company filed a complaint against the Company with the U.S. Occupational Safety and Health Administration (the OSHA Complaint) on March 9, 2015. This compliant was closed and dismissed by OSHA in January 2018 without any findings against the Company. The former Chief Financial Officer has 45 days from the receipt of the letter from OSHA, or approximately up to March 29, 2018 to appeal this OSHA decision.
The entire disclosure for commitments and contingencies.
Reference 1: http://www.xbrl.org/2003/role/presentationRef