Note 10 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies Disclosure [Text Block]

10. Commitments and Contingencies

The Company has entered into various agreements with third parties and certain related parties in connection with the research and development activities of its existing product candidates as well as discovery efforts on potential new product candidates. These agreements include fixed obligations to sponsor research and development activities and minimum royalty payments for licensed patents. These amounts do not include any additional amounts that the Company may be required to pay under its license agreements upon the achievement of scientific, regulatory and commercial milestones, including milestones such as the submission of an investigational new drug application to the FDA and the first commercial sale of the Company's products in various countries. As of December 31, 2012 the Company is uncertain as to whether any of these contingent events will become realized. The Company is also party to five agreements that require it to make milestone payments, royalties on net sales of the Company's products, and payments on sublicense income received by the Company. There were no milestone payments or royalties on net sales accrued for any of these agreements as of December 31, 2012 and 2011 as none were due.

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business. The Company accrues for liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. For all periods presented, the Company is not a party to any pending material litigation or other material legal proceedings.

The Company has entered into employment agreements with three key executives who, if terminated by the Company without cause as described in these agreements, would be entitled to severance pay.

Capital Lease

In December 2011, the Company entered into a capital lease for scientific equipment in the amount of $304,673. The terms of the lease required an upfront payment of $82,983 and monthly payments of $7,616 for 36 months once the lease term began in March 2012. The Company made payments of $76,118 in 2012 under this capitalized lease obligation of which $23,708 was classified as interest payments and $52,410 were classified as principal payments. As of December 31, 2012 and 2011, accumulated depreciation for the leased equipment was $50,779 and $0, respectively.

As of December 31, 2012, future minimum future lease payments under capital leases are as follows:

2013	$	91,392
2014		91,392
2015		15,232
Total minimum lease payments		198,016
Interest expense related to future periods		28,735
Present value of minimum lease payments		169,281
Less: current portion		71,679
Non-current portion	$	97,602

Operating Leases

The Company leases laboratory facilities and office facilities at various locations with expiration dates ranging from 2013 to 2019. The Company recognizes rent expense on a straight-line basis over the term of the related operating leases. For the years ended December 31, 2012, 2011 and 2010, total rent expense related to the Company’s operating leases was $459,150, $396,667 and $345,722, respectively.

As of December 31, 2012, future minimum payments under operating leases are as follows: 

2013	$	571,640
2014		374,452
2015		381,163
2016		354,918
2017		365,565
2018 & beyond		567,580
Total minimum lease payments	$	2,615,318