Note 8 - Commitments

Operating leases

The Company leases a facility in Woburn, Massachusetts under an operating lease that expires January 30, 2022.

During the second quarter of 2015, the Company extended the term of its Gaithersburg, Maryland office lease, effective May 7, 2015, through January 31, 2021, with one additional five-year renewal at the Company’s election. The Company is responsible for all utilities, repairs, insurance, and taxes under this operating lease. Effective July 1, 2015, the Company further modified its lease agreement to add additional leased space to its headquarters. Additionally, the Company leases office space in Denmark; this lease is currently on a month-to-month basis.

Rent expense under the Company’s facility operating leases for the year ended December 31, 2017 and 2016 was $949,244 and $1,000,726, respectively.

Capital leases

The Company leases computer equipment, office furniture, and equipment under various capital leases. The leases expire at various dates through 2021. The leases require monthly principal and interest payments. Following is a schedule by year of the estimated future minimum payments under all operating and capital leases as of December 31, 2017:

Year ending December 31,	Capital Leases			Operating Leases		Total
2018	$	177,464		$	1,041,323	$	1,218,787
2019		85,393			1,054,374		1,139,767
2020		56,981			1,072,748		1,129,729
2021		1,773			482,058		483,830
2022 and thereafter	-				35,647		35,647
Total		321,611		$	3,686,150	$	4,007,760
Less: amount representing interest		(36,619	)
Net present value of future minimum lease payments		284,992
Current maturities		(154,839	)
Long-term maturities	$	130,153

Assets under capital leases were included in the following balance sheet categories as of December 31:

	2017			2016
Laboratory and manufacturing equipment	$	850,792		$	560,829
Office furniture and equipment		64,790			64,790
Computers and network equipment		24,350			24,350
Less accumulated amortization		(454,471	)		(270,808	)
Capital lease assets, net	$	485,461		$	379,161

Amortization expense associated with equipment under capital leases for the years ended December 31, 2017 and 2016 was $183,663 and $161,606, respectively, and is included within depreciation and amortization expense in the consolidated statements of operations.

Registration and other stockholder rights

In connection with the various investment transactions, the Company entered into registration rights agreements with stockholders, pursuant to which the investors were granted certain demand registration rights and/or piggyback and/or resale registration rights in connection with subsequent registered offerings of the Company’s common stock.

Restructuring

In early June 2017, the Company commenced a restructuring of its operations to improve efficiency and reduce its cost structure. The restructuring plans anticipate that the Company will consolidate operations for FDA-cleared and CE marked products and research and development activities for the Acuitas Rapid Test in Gaithersburg, Maryland, and reduce the size of its commercial organization while the Company works to complete the development of its Acuitas Rapid Test and Acuitas Lighthouse Knowledgebase products and services in development.

There were approximately $121,000 of one-time termination benefits that were recognized during the year ended December 31, 2017 related to the restructuring. The Company does not anticipate any further one-time termination benefits related to the restructuring plan. Retention agreements were issued to certain employees in which retention bonuses are earned and paid upon the completion of a designated service period. The service periods ended in December 2017. The Company incurred total retention expense of approximately $68,000 during the year ended December 31, 2017. The future minimum lease payments for the Woburn facility were approximately $1.8 million as of December 31, 2017. A liability for costs that will continue to be incurred under a contract for its remaining term without economic benefit to the entity shall be recognized at the cease-use date. If the contract is an operating lease the fair value of the liability at the cease-use date shall be determined based on the remaining lease rentals, adjusted for the effects of any prepaid or deferred items recognized under the lease, and reduced by estimated sublease rentals that could be reasonably obtained for the property. The Company expects the cease-use date for the Woburn facility to be in the second quarter of 2018. We have not estimated the contract termination costs associated with this lease given that we have not yet reached the cease use date and given that we have only begun sublease pursuit activities. We do not believe there will be significant additional costs related to restructuring outside of what is described herein.