The good news?
I guess Fred is setting the shareholders up.
Cash Requirements
Other than cash on hand and accounts receivable, we have no material unused sources of liquidity at this time. Our monthly cash operating costs average approximately $70,000 per month. Assuming no new license revenues and current expenditure levels we would require approximately $840,000 of additional resources to fund operations for the next twelve months. We believe we may be able to obtain additional funds from future licensing arrangements or other financing sources but the timing thereof is subject to many factors and risks, many outside our control. Our operating plans may require additional funds in future periods and should additional funds not be available, we may be required to curtail or scale back operations. Potential sources of such funds include exercise of outstanding options, or debt financing or new equity offerings. However, there is no assurance that options will be exercised or that debt or equity financing will be available if and when needed. Any future financing may be dilutive to existing stockholders.
Facility Lease
In January 2012, the Company entered into a sixty-two month facility lease for its corporate office location, commencing May 1, 2012, for approximately 3,253 square feet at 16870 West Bernardo Drive, Suite 120, San Diego, California. The aggregate monthly payment is $7,157 excluding utilities and costs. Future minimum lease commitments at December 31, 2016 total $42,940. The Company recognizes rent expense by the straight-line method over the lease term. As of December 31, 2016, deferred rent totaled $7,319. The Company is negotiating with the landlord an early exit from this lease.
