Annual report pursuant to Section 13 and 15(d)

12. COMMITMENTS AND CONTINGENCIES

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12. COMMITMENTS AND CONTINGENCIES
12 Months Ended
Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

12. COMMITMENTS AND CONTINGENCIES

 

EMPLOYMENT CONTRACTS

 

We entered into an employment agreement with our Chief Executive Officer (“CEO”) effective April 1, 1999. The agreement, which is cancelable by either party upon sixty days’ notice, will be in effect until the CEO retires or ceases to be employed by us. Under the terms of the agreement, if the CEO is terminated he may become eligible to receive a salary continuation payment in the amount of at least twelve months' base salary, which was increased to $385,000 per year in September 2015.

 

LEASE COMMITMENTS

 

We currently lease approximately 2,600 square feet of executive office space at 9635 Granite Ridge Drive, Suite 100, San Diego, California 92123 under a 39-month gross plus utilities lease that commenced on December 1, 2014 and was extended in May 2018 (see Note 11). The initial rental rate under the lease extension is $7,986 per month. Such lease expires in on August 31, 2021. We believe this leased facility will be satisfactory for our office needs over the term of the lease.

 

We also rent approximately 1,700 square feet of laboratory space at 11585 Sorrento Valley Road, Suite 109, San Diego, California 92121 at the rate of $4,548 per month on a one-year lease that expires on November 30, 2018. Our current plans are to renew the lease prior to expiration or to secure alternative lab space in the San Diego area.

 

Rent expense, which is included in general and administrative expenses, approximated $136,000 and $151,000 for the fiscal years ended March 31, 2017 and 2016, respectively.

 

As of March 31, 2018, our commitments under the lease agreements are as follows:

 

    2019     2020  
9635 Granite Ridge Drive, Suite 100, San Diego, CA 92123 office lease   $ 6,620     $  
                 
11585 Sorrento Valley Road, Suite 109, San Diego, CA 92121 office lease     36,380        
Total Lease Commitments   $ 43,000     $  

 

Following an extension in May 2018 of our lease relating to our Granite Ridge Drive space (see Note 11), our commitments under our lease agreements are as follows:

 

    Fiscal Years Ending March 31,  
    2019     2020     2021     2022     2023  
9635 Granite Ridge Drive, Suite 100, San Diego, CA
92123 office lease
  $ 94,543     $ 98,902     $ 98,622     $ 102,074     $ 43,670  
                                         
11585 Sorrento Valley Road, Suite 109, San Diego, CA 92121 office lease     36,380                          
Total Lease Commitments   $ 130,923     $ 98,902     $ 98,622     $ 102,074     $ 43,670  

 

LEGAL MATTERS

 

From time to time, claims are made against us in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from selling one or more products or engaging in other activities.

 

The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods. We are not presently a party to any pending or threatened legal proceedings.