NOTE 15 – COMMITMENTS

Operating Leases

We lease approximately 1,000 square feet of office space in Wuxi, China. The annual rental cost is approximately $4,000 and the lease expires in October 2017. The lease can be renewed on an annual basis.

Rent expense for all operating leases for the fiscal years ended March 31, 2017 and 2016 was $3,738 and $21,206, respectively.

Future minimum lease payments required under non-cancellable operating leases at March 31, 2017 totaled $1,983.

Expiration of a Lease

The Company leased approximately 1,100 square feet located at 992 Old Eagle School Road, Wayne, Pennsylvania, pursuant to an office lease with GPX Wayne Office Properties, L.P., or GPX Wayne. On June 30, 2016, this office lease expired under its own terms and was not renewed. Other than as described above, there is no relationship between the Company and GPX Wayne.

Employment Agreements

We have employment agreements with each of our executive officers. Such agreements provide for minimum salary levels, adjusted annually, and incentive bonuses that are payable if specified company goals are attained. The aggregate commitment at March 31, 2017 for future executive salaries during the fiscal year ending March 31, 2018, including severance for our former chief financial officer and fiscal 2017 bonuses payable after March 31, 2017, was approximately $0.8 million. The aggregate commitment at March 31, 2017 was approximately $0.4 million for accrued payroll, vacation and holiday pay for the remainder of our employees.

Purchase Commitments

As of March 31, 2017, we had $0.9 million in purchase obligations outstanding, which primarily consisted of contractual commitments to purchase new machinery and equipment.

Class Action Lawsuit

On or about February 26, 2016, nine former employees of Ranor filed a complaint in the Massachusetts Superior Court, Worcester County, against former and current executive officers of Ranor, alleging violations of the Massachusetts Wage Act, breach of contract and conversion. Plaintiffs claim that Ranor’s modification to its personal time off, or PTO, policy in April 2014 caused these employees to forfeit earned PTO. Plaintiffs purport to assert their claims on behalf of a class of all current and former employees of Ranor who were affected by the modification to Ranor’s PTO policy. The pre-trial discovery phase ended on June 21, 2017. No trial date has been set.