Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Operating Leases

 The Company’s corporate headquarters totals 32,551 square feet and is located in Carlsbad, California.  Effective November 2010, the Company entered into an amended lease for this facility with average monthly rent payments of approximately $29,000 per month.  In April 2013, the Company amended this lease to (i) extend the expiration date to December 31, 2019, and (ii) give the Company the right to terminate the lease commencing on April 1, 2015 with nine-months written notice.  The monthly rent payments after 2014 will increase by 3% per year. Effective August 2014, the Company entered into a five-year lease agreement to rent approximately 1,200 square feet of office and retail space in Encinitas, CA. Monthly base rent is $5,700, subject to annual 3% increases.

The Company also leases approximately 6,500 square feet of a facility in Varese, Italy with monthly lease payments effective March 2013 of €1,500 per month. On March 10, 2014, the Company elected to terminate its lease in Italy, effective September 10, 2014. In addition, the Company leases an office space totaling approximately 400 square feet in Vancouver, Canada at a monthly rate of CAD1,295 (approximately $1,161).  The Company also leases certain computer equipment and vehicles.

 Total rent expense was approximately $320,000 and $307,000 for the nine months ended September 30, 2014 and 2013, respectively.

 Future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year are as follows:

	(Thousands)
Year Ending December 31,
2014 (Remaining Payments)	$	112
2015		441
2016		448
2017		462
2018		475
Thereafter		459
Total	$	2,397

Capital Leases

  Future minimum lease payments under capital leases at September 30, 2014 are as follows:

	(Thousands)
Year Ending December 31,
2014 (Remaining Payments)	$	19
2015		76
2016		23
Total minimum lease payments		118
Amount representing interest		(6	)
Present value of minimum lease payments		112
Less current portion		72
Noncurrent portion	$	40

Athlete Contracts

At September 30, 2014, the Company has entered into endorsement contracts with certain athletes to actively wear and endorse the Company’s products.  Payments under these contracts total approximately $473,000, $408,000 and $291,000 in 2014, 2015 and 2016, respectively, and may include additional performance-based incentives and/or product-specific sales incentives.  At September 30, 2014, the Company also had pending endorsement contracts with certain athletes to actively wear and endorse the Company’s products, with payments totaling approximately $158,000.

Litigation

 From time to time the Company may be party to lawsuits in the ordinary course of business.  The Company is not currently a party to any material legal proceedings, which it believes will have a material adverse impact on its financial position.