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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2011
Notes to Financial Statements  
Note 9. Commitments and Contingencies

Note 9: Commitments and Contingencies

 

Office Lease

 

In August 2010, we signed a six year and two month lease for 16,059 square feet for our corporate headquarters in Morrisville, NC.  At our option, we may terminate the lease anytime after October 31, 2014 in exchange for an early termination fee of $135,000.  If we do not terminate the lease early, our required minimum lease payments are as follows:

 

Year Ended December 31:   
2012  $78,833 
2013   137,589 
2014   141,428 
2015   144,411 
2016   123,336 
Thereafter   —   
           Total  $625,597 

 

Rental expenses associated with our office leases totaled $153,585 and $76,132 for the years ended December 31, 2011 and 2010, respectively.

  

Litigation

 

On June 24, 2011, Kinder Investments, LP (“Kinder”), a former holder of five shares of the Company’s Series A preferred stock, sued the Company, its current officers and directors, and it’s outside legal counsel, claiming the Company falsely forced the redemption of Kinder’s preferred stock without paying $1,075,000 in accumulated dividends and other amounts it believed was due.  The Company believed the claims were without merit and retained legal counsel and disputed the claims.  The Company settled the litigation on February 22, 2012 on favorable terms without admitting any liability.  The Company recorded litigation expense of $206,263 during the year ended December 31, 2011, of which $130,000 was recorded as an accrued liability at December 31, 2011. This accrual includes all legal and settlement cost incurred in 2012 to resolve this matter.