NOTE 8. LEASES

In May 2012, the Company signed a lease for new office space for its corporate headquarters, and moved into the new location in August 2012. The lease has a five-year term; rental costs are approximately $13,000 per month, increasing 3% annually.

The Company’s research facility in Madison, Wisconsin is leased through February 28, 2019. Monthly rental expense is approximately $22,000. Other monthly rental expenses include common area maintenance and real estate taxes totaling approximately $13,000 per month. Utilities costs are approximately $16,000 per month. Including monthly payments recorded under a capital lease of approximately $21,000, total monthly costs are approximately $72,000 per month.

Facility and equipment rent expense, related to continuing operations, for the period ended December 31, 2012 and 2011 was $145,000 and $90,000, respectively. From inception to date, rent expense was $4,270,000.

As of December 31, 2012, future minimum lease payments due in fiscal years under capitalized leases are as follows:


2013	$	192,634
2014		256,846
2015		256,846
2016		256,846
2017		256,846
2018		256,846
2019 and thereafter		107,019
Less interest		(139,720	)

Principal		1,444,161
Less current portion		(216,419	)

Noncurrent portion	$	1,227,743

As of December 31, 2012, future minimum lease payments due in fiscal years under operating leases are as follows:


2013	$	270,056
2014		434,229
2015		445,921
2016		457,961
2017		470,154
2018		359,370
2019 and thereafter		125,415

Total	$	2,563,106