CAPITAL LEASES AND OTHER OBLIGATIONS

9 Months Ended

Sep. 30, 2017

(9) CAPITAL LEASES AND OTHER OBLIGATIONS

The Company had previously entered into a Lease Termination Agreement (“LTA”) and new Lease Agreement (“LA”) with its landlord relating to the Company’s headquarters location in Lone Tree, Colorado, under which the Company reduced the amount of space leased at its headquarters. Subsequently, on August 12, 2016, the Company entered into an amended Lease Agreement to extend and amend the terms and conditions of the LA.

The following is a summary of the key terms of the LA, as amended:

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The original term of the LA term was extended by two years and as amended is to end, unless sooner terminated, on December 31, 2018;

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Fixed rental payments were decreased from $49,000 to $38,000 per month; and

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The Company and landlord shall each have the right to terminate the lease at any time, without liability to the other, with ninety days (originally six months) prior written notice to the Company and ninety days written notice to the Landlord.

Also see Note 13 below regarding the Company’s office lease commitments.

The Company also leases certain equipment under capital leases which expire on various dates through 2018. Imputed interest rates on the leases range from approximately 2% to 10%. At September 30, 2017, the total recorded cost of assets under capital leases was approximately $461,000. Accumulated depreciation related to these assets totals approximately $356,000.