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Commitments and Contingencies
 6 Months Ended
Jun. 30, 2015
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingency

NOTE 11 — Commitments and Contingencies

 

Operating Lease

The Company leases office space under a non-cancelable operating lease that provides the Company approximately 37,100 square feet in Newark, California. Rental expense was $107,098 and $214,598 for the three and six month periods ended June 30, 2015, respectively. Rental expense for the three and six month periods ended June 30, 2014 was $107,403 and $214,468, respectively. The Company recorded a deferred rent obligation in accrued liabilities in the amount of $277,120 and $263,476 at June 30, 2015 and December 31, 2014, respectively. 

 

Future minimum lease payments under the operating lease at June 30, 2015 are as shown below:

 

Annual minimum payments:  Amount
2015 (July 1, 2015 to December 31, 2015)   $200,483 
2016   408,986 
2017   425,345 
2018   442,359 
2019 to 2022   1,689,777 
     Total minimum payments   $3,166,950

 

Capital Lease Obligations

The Company leases certain of its equipment under capital leases. These leases are collateralized by their underlying assets. At June 30, 2015 and December 31, 2014, property and equipment with a cost of $87,945 were subject to such financing arrangements. Related accumulated amortization at June 30, 2015 and December 31, 2014 amounted to $65,435 and $53,761, respectively.

 

Future minimum payments under capital lease and equipment financing arrangements as of June 30, 2015, are as follows:

 

Annual minimum payments:  Amount
2015 (July 1, 2015 to December 31, 2015)   $13,766 
2016   12,449 
     Total minimum payments    26,215 
Less amount representing interest    (1,265)
     Present value of net minimum payments    24,950 
Short term portion of capital leases    (24,950)
Long term portion of capital leases   $—

 

 

Purchase Commitments

As of June 30, 2015, the Company has non-cancelable purchase commitments for inventory to be used in the ordinary course of business of approximately $1,689,000.

 

Legal Matters

The Company is subject to disputes, claims, requests for indemnification and lawsuits arising in the ordinary course of business. Under the indemnification provisions of the Company’s customer agreements, the Company routinely agrees to indemnify and defend its customers against infringement of any patent, trademark, copyright, trade secrets, or other intellectual property rights arising from customers’ legal use of the Company’s products or services. The exposure to the Company under these indemnification provisions is generally limited to the total amount paid for the indemnified products. However, certain indemnification provisions potentially expose the Company to losses in excess of the aggregate amount received from the customer. To date, there have been no claims against the Company by its customers pertaining to such indemnification provisions, and no amounts have been recorded. We are currently not a party to any material legal proceedings.