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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2014
Commitments and Contingencies |
Commitments and Contingencies | 16.Commitments and Contingencies Office Space Rental On September 4, 2014, the Company entered into a lease agreement for office space totaling approximately 2,900 square feet in Buffalo Grove, Illinois and relocated its corporate headquarters to this facility in the third quarter of 2014. The term of the lease commenced on September 15, 2014 and will continue through February 28, 2018. The Company has an option to renew the lease for one renewal term of three years. Under the lease agreement, the first five months are rent free and then the base rent will be approximately $6,000 per month through February 28, 2016 for a total of approximately $72,000 per year. The base rent will increase to approximately $6,100 per month for the first year thereafter and $6,200 per month for the second year thereafter. The Company’s contractual obligations with respect to rental commitments as of December 31, 2014 were as follows:
|  | Rental Commitments |
Payments due by period: |  |  |
One year |  | $ | 62,759 |
Two years |  | 72,920 |
Three years |  | 74,355 |
Four years |  | 12,432 |
Five years |  | — |
Over five years |  | — |
Total |  | $ | 222,466 |
Purchase Obligations As of December 31, 2014, the Company had future commitments for $793,391 in regards to the preclinical development of RES-440 and RES-529. Litigation From time to time, the Company is subject to various pending or threatened legal actions and proceedings, including those that arise in the ordinary course of its business, which may include employment matters, breach of contract disputes and stockholder litigation. Such actions and proceedings are subject to many uncertainties and to outcomes that are not predictable with assurance and that may not be known for extended periods of time. The Company records a liability in its consolidated financial statements for costs related to claims, including future legal costs, settlements and judgments, where the Company has assessed that a loss is probable and an amount can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred. In the opinion of management, as of December 31, 2014, the amount of liability, if any, with respect to these matters, individually or in the aggregate, will not materially affect the Company’s consolidated results of operations, financial position or cash flows. In July 2013, the Company received notice that a complaint for property damage had been filed by the Truck Insurance Exchange against the Company in Los Angeles Superior Court (Case No. BC513491) alleging damages for $393,592 related to water damage incurred by a printing company on the ground floor of the Company’s former office space in Los Angeles. This damage was alleged to have occurred in connection with a water leak in the Company’s former office in February 2013. The Company filed an answer to the complaint on or about August 23, 2013. The Company had accrued $393,592 in connection with this matter as of September 30, 2014. During fourth quarter of 2014, the Company settled this matter, and in connection with this settlement, made a cash payment of $150,000 to Truck Insurance Exchange resulting in a gain on settlement of $243,592 that is included in other income in the consolidated statement of operations. On December 22, 2014, this matter was dismissed with prejudice. On August 7, 2014, a complaint was filed in the Superior Court of Los Angeles County, California by Paul Feller, the Company’s former Chief Executive Officer under the caption Paul Feller v. RestorGenex Corporation, Pro Sports & Entertainment, Inc., ProElite, Inc. and Stratus Media Group, GmbH (Case No. BC553996). The complaint asserts various causes of action, including, among other things, promissory fraud, negligent misrepresentation, breach of contract, breach of employment agreement, breach of the covenant of good faith and fair dealing, violations of the California Labor Code and common counts. The plaintiff is seeking, among other things, compensatory damages in an undetermined amount, punitive damages, accrued interest and an award of attorneys’ fees and costs. On December 30, 2014, the Company filed a petition to compel arbitration and a motion to stay the action. A hearing is scheduled for the petition and motion on April 14, 2015. The Company believes this action is without merit and intends to defend the action vigorously. Because this lawsuit is in an early stage, the Company does not believe a loss is probable, and is unable to predict the outcome of the lawsuit and the possible loss or range of loss, if any, associated with its resolution or any potential effect the lawsuit may have on the Company’s financial position, results of operations or cash flows. Depending on the outcome or resolution of this lawsuit, it could have a material effect on the Company’s financial position, results of operations or cash flows.

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