Note 10.       Operating Leases and Rental Expense



The Company leases approximately 2,600 square feet of office space located in Miami, Florida. The Company executed the lease for this office space effective October 31, 2016, for a three year term commencing on November 1, 2016 and ending on October 31, 2019.  The lease requires escalating monthly payments ranging from $9,240 to $9,994.  The Company has two renewal options to extend the term for a period of three years each. 



The Company leases approximately 6,600 square feet of office space located in Chicago, Illinois. On May 11, 2016, the Company signed a new lease, effective November 1, 2016, for this office space for a seven year period commencing on November 1, 2016 and ending on October 31, 2023.  The lease grants the Company a seven month lease holiday beginning November 1, 2016, a five month lease abatement beginning June 1, 2017, and provides a tenant improvement allowance.  The lease requires escalating monthly payments ranging from $5,833 to $9,285, plus real estate taxes, utilities and maintenance expenses from June 1, 2017 to October 31, 2023.  Based on the terms of the lease agreement, the Company was required to make a security deposit of $55,000.  Effective August 2017, the Company entered into a sublease for its office space in Chicago, Illinois.  The Company continues to be responsible for performance under the lease until it expires on October 31, 2023.



The Company leases 6,400 square feet of office space located in London, England. The lease expires in June 2020.  The lease requires quarterly payments of approximately $13,500 through December 2011, quarterly payments of approximately $27,000 from January 2012 through June 2015 and quarterly payments of approximately $24,000 from June 2016 through June 2020.  Based on the terms of the lease agreement, the Company made a security deposit of  $59,000.



The Company leases 45,800 square feet of manufacturing space in Selangor D.E., Malaysia under a lease that requires monthly payments of approximately $15,000 through August 2019 and may be renewed at the option of the Company for an additional three year term. 



The Company also leases equipment under a number of lease agreements which expire at various dates through September 2021.  Details of operating lease expense, including real estate taxes and insurance, for the years ended September 30, 2017, 2016, and 2015 are as follows:







Future minimum payments under leases consist of the following as of September 30, 2017:  







The minimum lease payments presented above do not include CAM charges or real estate taxes due under the Company’s office operating leases. These charges are generally not fixed and can fluctuate from year to year.