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Commitments and Contingencies
 3 Months Ended
Mar. 31, 2015
Commitments and Contingencies [Abstract]  
Commitments and Contingencies
8.Commitments and Contingencies

 

Leases

 

The Company leases a plant in Kentucky under an operating lease which expires May 31, 2016. Future minimum base rental payments required under the lease are as follows:

 

Year ending December 31   
    
2015 (9 months) $31,640 
2016  17,578 
Total $49,218 

 

Monthly base rental payments approximate $3,500. The lease agreement also provides for additional rents based on increases in building operating costs and real estate taxes. Rent expense for the three month periods ended March 31, 2015 and 2014, was $20,461 and $14,626, respectively.

 

Employment and Consulting Agreements

 

The Company has entered into various agreements with officers, directors, employees and consultants that expire in one to five years. The agreements provide for annual compensation of up to $145,000 and the issuance of stock options, at exercise prices ranging from $0.20 to $5.00, underlying 9,375,000 shares of common stock issuable upon the Company’s revenue exceeding amounts ranging from $2,000,000 to $100,000,000, as defined. In addition, the agreements provide for bonus compensation to these individuals aggregating up to 15% (with no individual having more than 5%) of the Company’s pretax income.

 

Legal Matters

 

In the normal course of business operations the Company may become involved in various legal matters. At March 31, 2015, the Company’s management does not believe that there are any potential legal matters that could have an adverse effect on the Company’s financial position.

 

In November 2009, the Company entered into a settlement agreement to resolve all aspects of litigation relating to a patent suit. As part of that settlement agreement, the Company received $440,000 as reimbursement for litigation costs. The Company also was awarded $200,000 in eight installments of $25,000 every six months beginning on January 15, 2011, in return for an exclusive patent license. The term of the license agreement is consistent with the term of the $25,000 semiannual payments. The $25,000 installments have been recorded as revenue upon receipt of the funds. The Company received the final installment during the three months ended March 31, 2014.