Commitments and Contingencies

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 15 - Commitments and Contingencies

Legal Proceedings

The Company may be subject to legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on its financial position, results of operations or liquidity.

Neogen Settlement Agreement 

See Note 14 above with regards to the Settlement Agreement with Neogen.  

Although notice of the legal action by Neogen and the Settlement Agreement with Neogen, occurred after December 31, 2016, as per the provisions of Accounting Standards Codification Topic 450 Loss Contingencies, included in the financial statements of the Company at December 31, 2016 is a $1,000 charge to general and administrative expenses and a corresponding accrual of contract cancellation settlement agreement related to this agreement. 

Employment Agreement 

On June 2, 2017, the Company entered into an employment agreement with a Executive Vice President and Chief Operations Officer (“COO”), with a start date of June 19, 2017. Under the terms of the employment agreement, the COO will receive an annual base salary of $300,000 and a one-time signing bonus of restricted stock units representing 60,000 shares of common stock, which will vest on a quarterly basis over a 3-year period, and will be subject to the terms and conditions of the 2015 Plan and standard form of restricted stock unit agreement. Further, the Company will reimburse the COO for moving and moving-related expenses up to $30,000 and up to $2,000 per month for the cost of rental allowance for up to six months. The COO will be eligible to receive annual incentive bonus with a target value equal to 100% of his annual base salary, payable 30% in cash and 70% in restricted stock units or stock options, subject to his achievement of performance objectives to be determined by the Company’s compensation committee or board of directors. The COO will also be eligible to participate in the standard benefits, vacation and expense reimbursement plans offered to similarly situated employees, and will enter into the Company’s standard form of indemnification agreement applicable to its directors and officers.

In the event of a Change in Control (as defined in the 2015 Plan), or upon the COO’s termination by the Company without Cause (as defined in the 2015 Plan) or termination by the COO for Good Reason (as defined below), 100% of the unvested portion of all of the COO’s equity awards (RSUs, options, etc.) shall immediately vest and be exercisable effective immediately prior to: the closing of the Change in Control, on the date of said termination by the Company without Cause, or the date of termination by the COO for Good 

Reason, as applicable. “Good Reason” means COO’s resignation within thirty (30) days following expiration of any Company cure period (discussed below) following the occurrence of one or more of the following, without COO’s written consent: (a) a material reduction in COO’s annual base salary, bonus, or other benefits previously provided by the Company pursuant to COO’s employment letter agreement or otherwise; (b) a material diminution of the COO’s job duties or responsibilities; or (c) a change in the location of employment of more than fifty (50) miles. It is further agreed that the COO will not resign for Good Reason without first providing the Company with written notice of the acts or omissions constituting the grounds for “Good Reason” within ninety (90) days of the initial existence of the grounds for “Good Reason” and a reasonable cure period of not less than thirty (30) days following the date of such notice (during which the grounds have not been cured). 

Resolution of Dispute

In recognition of his continued support and cooperation, and to resolve a dispute regarding whether his options appropriately expired in the first quarter of 2016, in July 2016, the Company’s Board of Directors agreed to issue to its former chief executive officer 120,000 shares of the Company’s common stock. The expense of $300 associated with this full and final settlement was recorded at December 31, 2016.

Lease Commitments

Rent expense was $165 and $234 for the six months ended and year ended June 30, 2017 and December 31, 2016, respectively. The future minimum lease payments under non-cancellable operating lease and future minimum capital lease payments as of June 30, 2017 are follows:  

	Capital Leases		Operating  Lease
Years Ending December 31,
2017		51		130
2018		96		258
2019		88		221
2020		67		—
2021		56		—
2022		28		—
Total minimum lease payments	$	386	$	609

	Capital Leases
Less: amounts representing interest ( ranging from 7.25% to 11.56%)	$	82
Present value of minimum lease payments		304
Less: current installments under capital lease obligations		65
Total long-term portion	$	239