Lease Obligations

12 Months Ended

Dec. 31, 2016

10. Lease Obligations

The Company leases its facilities under operating leases. For the years ended December 31, 2016 and 2015 rent expense was $1,187,989 and $1,205,338, respectively. The rent expense for the years ended December 31, 2016 and 2015 is net of sublease income of $91,579 and $18,912, respectively.

In January 2006, the Company moved its primary operations into its current facilities. The facility is subject to a lease which expires in December 31, 2018. Under the terms of the lease, the Company has options to renew for up to three additional years. The lease contains an escalating rent provision which the Company has straight-lined over the term of the lease.

In the third quarter of 2013, the Company modified the existing lease agreement to terminate approximately 13,000 square feet of unimproved space. The costs associated with the termination were $515,138, and were accrued as a rent liability as of September 30, 2013. As of December 31, 2016, the remaining accrued costs associated with the termination were $181,601.

In the fourth quarter of 2015, the Company entered a sublease agreement to sublease 3,152 square feet of the first floor office space through December 31, 2018. In July 2016, the Company and the subtenant mutually agreed to an early termination of the sublease, effective July 31, 2016.

In August 2016 the Company entered into an agreement to sublease approximately 11,000 square feet of office space through December 31, 2018. The costs associated with the sublease were $40,972 and were accrued as a rent liability as of August 31, 2016. As of December 31, 2016, the remaining accrued costs associated with the termination were $21,286. As part of the sublease agreement, the Company will sublease an additional 16,000 square feet beginning in January 2017.

The future minimum lease payments under non-cancelable leases as of December 31, 2016 are as follows (excluding sublease income):



Year		Operating Lease Payments
2017	$	2,002,178
2018		2,037,858
2019		11,496
Total minimum lease payments		4,051,532
Less amounts representing sublease receipts		(1,510,631)
	$	2,540,901