12. 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 IND to the FDA and the first commercial sale of the Company’s products in various countries. As of December 31, 2013 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, pay royalties on net sales of the Company’s products, and make payments on sublicense income received by the Company relating to certain products. There were no milestone payments or royalties on net sales accrued for any of these agreements as of December 31, 2013 and 2012 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 agreements with three key executives who, if terminated by the Company without cause as described in these agreements, would be entitled to severance pay.

As of December 31, 2013, the Company had unconditional purchase obligations totaling $1,024,477 for goods and services, all of which the Company anticipates to incur during 2014.

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. Principal payments under the capital lease obligation were $78,125 and $52,410 for the years ended December 31, 2013 and 2012, respectively. Interest payments under the capital lease obligation were $20,827 and $23,708 for the years ended December 31, 2013 and 2012, respectively. As of December 31, 2012, accumulated depreciation for the leased equipment was $50,779. As of December 31, 2013, the Company recognized an impairment loss of $105,491 related to this leased asset as the anticipated discounted future cash flows resulting from the lease with BBL exceeded the carrying value of the asset, and as such, the Company adjusted the gross cost and carrying value down to $87,468, resulting in $0 accumulated depreciation as of December 31, 2013.

As of December 31, 2013, future minimum future lease payments under capital leases are as follows:


2014	$	91,341
2015		7,612

Total minimum lease payments		98,953
Interest expense related to future periods		7,797

Present value of minimum lease payments		91,156
Less: current portion		83,634

Non-current portion	$	7,522

Operating Leases

The Company leases laboratory facilities and office facilities at various locations with expiration dates ranging from 2014 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, 2013, 2012 and 2011, total rent expense related to the Company’s operating leases was $511,029, $459,150 and $396,667, respectively.

As of December 31, 2013, future minimum payments under operating leases are as follows:


2014	$	471,925
2015		344,580
2016		354,918
2017		365,565
2018		376,532
2019		191,048

Total minimum lease payments	$	2,104,568