Quarterly report pursuant to Section 13 or 15(d)

10. Contractual Obligations

10. Contractual Obligations

6 Months Ended

Jun. 30, 2016

The Company has certain contractual commitments as of June 30, 2016 for future periods, including office leases, minimum guaranteed compensation payments and other agreements as described in the following table and associated footnotes:

			Research and
Year ending	Office		License		Compensation		Total
December 31,	Lease (1)		Agreements (2)		Agreements (3)		Obligations
2016	$	34,980	$	93,750	$	175,000	$	303,730
2017		69,960		187,500		305,429		562,889
2018		40,810		187,500		290,000		518,310
2019		–		187,500		54,375		241,875
2020		–		187,500		–		187,500
Total	$	145,750	$	843,750	$	824,804	$	1,814,304

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(1)

Consists of rent for the Company’s Santa Barbara Facility expiring on July 31, 2018.

(2)

Consists of license maintenance fees to Temple University in the amount of $187,500 paid annually through the life of the underlying patents or until otherwise terminated by either party.

(3)

Consists of base salary and certain contractually-provided benefits, to i) an executive officer, pursuant to an employment agreement at a base salary of $290,000 per year and, as amended by the Board on March 10, 2016, expires on March 8, 2019; and ii) and a severance agreement of a former officer in the amount of $45,429.

Effective May 1, 2016, the Company vacated the Santa Barbara Facility and subleased the space through the term of the master lease, terminating July 31, 2018. Under the master lease, the Company is committed to pay $5,830 per month. This expense is offset by sublease income of $4,500 per month, for a net monthly expense of $1,330, totaling $35,910 over the remaining 27-month term of the master lease. At June 30, 2016, the Company accrued $33,250 to account for the estimated loss in the Santa Barbara Facility lease agreement which is reflected in as part of Accounts Payable and accrued expense on the accompanying consolidated balance sheet.

Effective June 1, 2016, the Company relocated its Santa Barbara office to an office space located at 5266 Hollister Avenue, Suite 219, Santa Barbara, CA 93111, under a twelve-month lease at a lease rate of $751 per month. This expense is reflected in Operating Expenses on the accompanying consolidated statements of operations.