Quarterly report pursuant to sections 13 or 15(d)

Commitments and Contingencies

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Commitments and Contingencies
6 Months Ended
Jun. 30, 2011
Notes to Financial Statements  
Commitments and Contingencies

Commitments — On June 12, 2011, the Company’s board of directors approved an Assignment and Assumption Agreement (the Lease Assignment”) under which the Company agreed with Juvaris BioTherapeutics, Inc. (Juvaris”) to assume all of Juvaris’ rights, obligation, and interest under a Lease Agreement for premises located at 866 Malcolm Road Suite #100F, Burlingame, California. Pursuant to the Lease Assignment, the Company paid Juvaris a fee of $60,000. The Company’s rights under the Lease Assignment are also governed in part by a Consent to Assignment executed by us, Juvaris, and landlord ARE-819/853 Mitten Road, LLC. Under the Consent to Assignment, the Company is required, among other things, to furnish the landlord with a letter of credit in the amount of $60,425.54.  As amended, the Lease Agreement being assumed provides for the lease of 11,242 square feet of space located at 866 Malcolm Road Suite #100F in Burlingame California at a rate of $2.92 per square foot through February 29, 2012. The Lease Assignment and the Consent Agreement were timely filed with the Securities and Exchange Commission under a Form 8K filing. In July 2011 the Lease Assignment and discussions with Juvarius BioTherapeutics, Inc. were terminated. The Company has no further commitments to such lease assignment. The Company also expended $75,000 toward the option to acquire certain assets of Juvaris. These options has also expired and the Company has no further obligations to Juvaris.

 

The Company leases its main office facility and a second facility for research in Sunnyvale, CA under sublease agreements that provide for month to month extensions by the Company.

 

Rent expense for the three months ended June 30, 2011 and June 30, 2010 was $31,037 and $15,240, respectively, and for the six months ended June 30, 2011 and June 30, 2010 rent expense was $61,489 and $30,480, respectively. For the period from January 14, 2008 (date of inception) to June 30, 201, rent expense was $189,960.

 

Contingencies — From time to time, the Company may become involved in litigation. Management is not currently aware of any matters that will have a material adverse effect on the financial position, results of operations, or cash flows of the Company.

 

The Company agreed to compensate certain vendors for services rendered contingent upon the occurrence of future financings as follows:

 

Future financing with proceeds of at least   
$1,000,000  $50,000 
1,250,000   20,000 
1,500,000   26,000 
2,000,000   50,000 
5,000,000   50,000 
6,000,000   20,000 
      
Total  $216,000 

  

The Company incurred various obligations related to the original acquisition of its intellectual property around the time the Company was founded.