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Note 5 - Operating Leases and Rental Expense
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Sep. 30, 2011
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| Leases of Lessee Disclosure [Text Block] |
Note
5. Operating
Leases and Rental Expense
The
Company’s corporate headquarters is located in
approximately 5,100 square feet of office space located in
Chicago, Illinois. On March 10, 2011, the Company signed a
lease amendment, effective November 1, 2010, which extended
the lease term for this office space for a five year period
commencing on November 1, 2011 and ending on October 31,
2016. The lease amendment grants the Company a
five month lease abatement beginning November 1, 2010,
reduces base rent and provides a tenant improvement
allowance. The lease requires escalating monthly
payments ranging from $6,797 to $7,859, plus real estate
taxes, utilities and maintenance expenses from April 1,
2011 to October 31, 2016. The lease stipulates
that after five years, the Company shall have a one-time
right to extend the term of the lease for an additional
three years by giving the landlord no less than twelve
months prior notice in writing.
Through
June 2010, the Company leased 40,000 square feet of office,
manufacturing and warehouse space in London, England (Note
13). Beginning in June 2010, the Company began
leasing 6,400 square feet of office space located in
London, England. The lease, which expires in June 2020,
includes an option by the Company to terminate the lease in
2015 by giving the landlord no less than six months prior
notice in writing. The lease requires quarterly payments of
approximately $13,500 through December 2011 and quarterly
payments of approximately $27,000 from January 2012 through
June 2015. The lease stipulates that after 5
years (June 2015) the principal rent will be reviewed and
adjusted to the higher of the principal rent immediately
prior to the review date or the market rate. Per the terms
of the lease agreement, the Company was also required to
make a security deposit equivalent to six months’
rent (approximately $66,000).
The
Company leases 16,000 square feet of manufacturing space in
Selangor D.E., Malaysia under a lease that requires
monthly payments of approximately $13,000 through August
2013 and may be renewed at the option of the Company for an
additional three year term. The Company also
leases 11,000 square feet of warehouse space in Selangor
D.E., Malaysia under a lease that requires monthly payments
of approximately $4,000 through February 2012
and may be renewed at the option of the Company for an
additional one year term.
The
Company also leases equipment under a number of lease
agreements which expire at various dates through June
2015. The aggregate monthly rental was $491 at
September 30, 2011. Details of operating lease expense,
including real estate taxes and insurance, for the years
ended September 30, 2011, 2010 and 2009 are as
follows:
The
Company is party to several leases classified as capital
leases which, in the aggregate, require monthly payments of
$1,458 through March 2012.
Future
minimum payments under leases consisted of the following as
of September 30, 2011:
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