Commitments and Contingencies

12 Months Ended

Mar. 31, 2015

Commitments and Contingencies

Commitments and Contingencies

4. Commitments and Contingencies

Effective December 1, 2013, we extended our noncancelable lease agreement through July 31, 2019 for 28,696 square feet of space for our facilities at 6797 Winchester Circle, Boulder, Colorado. The lease includes $172,176 of leasehold improvements granted by the landlord. The $172,176 was recorded on our balance sheets as leasehold improvements and deferred rent. The leasehold improvements are being amortized over the lesser of the lease term or the assets life and the deferred rent is being amortized against rent expense over the lease term. The minimum future lease payment, by fiscal year, as of March 31, 2015 is as follows:

Fiscal Year	Amount
2016	268,672
2017	276,732
2018	285,034
2019	293,585
2020	99,800
Total	$	1,223,823

We paid off our capital equipment lease with General Electric Capital Corporation and, at March 31, 2015, have no balance remaining.

Included in our furniture, fixtures and equipment balance is leased equipment that was acquired, under the provisions of a long-term capital lease, during the quarter ended June 30, 2013. The equipment had an original cost of $177,547 and has a net book value of $86,069 at March 31, 2015.

On May 29, 2015, we signed an amendment to our credit facility agreement with Silicon Valley Bank. The terms of the credit facility include a line of credit for $2,000,000 for one year, until May 29, 2016, at an interest rate calculated at the prime rate plus 1.25%, subject to increase upon a default. The liquidity ratio covenant limits our borrowing under the credit facility by a ratio of at least 2.0 to 1.0 of our eligible receivables plus cash, minus accounts payable that are over sixty days, at the time of borrowing. As of March 31, 2015, we had $64,000 of borrowings from the credit facility and, under our liquidity ratio limit, had an additional approximately $517,000 available to borrow. The credit facility is secured by all tangible and intangible assets, whether now owned or hereafter acquired, wherever located. Our credit facility is classified in the balance sheets as a long-term liability.

We are subject to regulation by the United States Food and Drug Administration (“FDA”). The FDA provides regulations governing the manufacture and sale of our products and regularly inspects us and other manufacturers to determine our and their compliance with these regulations. As of March 31, 2015, we believe we were in substantial compliance with all known regulations. FDA inspections are conducted periodically at the discretion of the FDA. We were last inspected in December 2012 and were notified of five observations from that inspection, none of which we believe to be material.

Our obligation with respect to employee severance benefits is minimized by the “at will” nature of the employee relationships. Our total obligation as of March 31, 2015 with respect to contingent severance benefit obligations was $87,282.