• Filing Date: 2016-03-30
  • Form Type: 10-K
  • Description: Annual report
v3.3.1.900
COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2015
COMMITMENTS AND CONTINGENCIES
6.
COMMITMENTS AND CONTINGENCIES
 
Leases
 
Capricor leases space for its corporate offices pursuant to a lease that is effective for a two year period beginning July 1, 2013 with an option to extend the lease for an additional twelve months. The monthly lease payment was $16,620 per month for the first twelve months of the term and increased to $17,285 per month for the second twelve months of the term. On March 3, 2015, Capricor executed a Second Amendment to Lease with The Bubble Real Estate Company, LLC, pursuant to which (i) additional space was added to the Company’s corporate office lease and (ii) the Company exercised its option to extend the lease term through June 30, 2016. Under the terms of the Second Amendment, commencing February 2, 2015, the base rent was $17,957 for one month, and, commencing March 2, 2015, the base rent increased to $21,420 per month for four months. Commencing July 1, 2015, the base rent increased to $22,111 per month for the remainder of the lease term.
 
On May 14, 2014, Capricor entered into a facilities lease with Cedars-Sinai Medical Center (“CSMC”), a shareholder of the Company, for two research labs (the “Facilities Lease”). The Facilities Lease is for a term of three years commencing June 1, 2014 and replaces the month-to-month lease that was previously in effect between CSMC and Capricor. The monthly lease payment under the Facilities Lease was approximately $15,461 per month for the first six months of the term and increased to approximately $19,350 per month for the remainder of the term. The amount of rent expense is subject to annual adjustments according to increases in the Consumer Price Index.
 
Unless renewed, each of the leases described above will not be in effect for fiscal year 2018. A summary of future minimum rental payments required under operating leases as of December 31, 2015 is as follows:
 
Years ended
 
Operating Leases
 
2016
 
$
364,866
 
2017
 
 
96,750
 
Total minimum lease payments
 
$
461,616
 
 
Expenses incurred under operating leases to unrelated parties for the years ended December 31, 2015 and 2014 were approximately $255,942 and $203,430, respectively. Expenses incurred under operating leases to related parties for the years ended December 31, 2015 and 2014 were approximately $224,421 and $153,682, respectively.
 
Legal Contingencies
 
Periodically, the Company may become involved in certain legal actions and claims arising in the ordinary course of business. There were no material legal actions or claims reported at December 31, 2015.