Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 12 – Commitments and Contingencies

On February 3, 2015, the Company and its newly-appointed Chief Executive Officer, Stephen E. Pirnat entered into an employment agreement (the Agreement) which terminates on December 31, 2017, unless earlier terminated. Compensation under the Agreement includes an annual salary of $350,000, a grant of stock options as described in Note 9, annual cash bonuses that may equal up to 60% of his annual salary and equity bonuses based on performance standards established by the Compensation Committee of the Board of Directors, medical and dental benefits for Mr. Pirnat and his family, other employee benefits offered to employees generally and relocation expenses up to approximately $100,000. The Agreement may be terminated by the Company without cause under certain circumstances, as defined in the Agreement, whereby a severance payment would be due in the amount of compensation that would have been due had employment not been terminated or one year of the current annual compensation, whichever is greater. In the event of a change in control, Mr. Pirnat would receive one year’s compensation and all previously granted stock options would vest in full. During the years ended December 31, 2016 and 2015, the Company incurred $0 and $39,000, respectively, in relocation costs for Mr. Pirnat.

The Company has a triple net lease for office and laboratory space in Seattle, Washington through March 2020. Under the terms of the lease, the Company paid no rent for the period November 2011 to February 2012 and for February 2014. Rent escalates annually by 3% through February 2017 and remains at a constant rate thereafter. The Company records monthly rent expense equal to the total of the payments over the lease term divided by the number of months of the lease term. For the years ended December 31, 2016 and 2015, the deferred rent was reduced by $17,000 and $13,000, respectively. Under the terms of the lease, the Company also pays monthly triple net operating costs which currently approximate $3,000 per month. The Company also has a triple net lease for office space in Tulsa, Oklahoma through August 2019 with monthly rent of $2,000 per month plus triple net operating costs.

Minimum future payments under the Company’s lease at December 31, 2016 are as follows:

2017		172,000
2018		173,000
2019		164,000
2020		37,000
	$	546,000

For the years ended December 31, 2016 and 2015, rent expense amounted to $191,000 and $217,000, respectively.

The Company has a field test agreement with a customer to demonstrate and test the Duplex technology in a once through steam generator (OTSG) used to facilitate a thermally enhanced oil recovery process. Under the terms of the agreement, the Company has retrofitted an OTSG unit in order to achieve certain performance criteria. The agreement also includes time-sensitive pricing, delivery and installation terms, if elected, that will apply to future purchases of this Duplex application by this customer.