NOTE 14 – LEASES

Lease settlement

On April, 29, 2011, the Company entered into a settlement agreement with a lessor whereby the Company would make monthly payments totaling $614,934 from January 1, 2011 to October 1, 2013, in exchange of a waiver of $786,945 in late and other fees, which is recorded as a gain on debt extinguishment on the 2011 statement of operations. In the event of default, this waived amount would be payable in full in addition to the settlement amount. Total rent settlement amounts payable were $0 as of June 30, 2014 and December 31, 2013.

Although in default at the end of 2012, the Company subsequently cured and settled the obligation in full on October 1, 2013. The lessor upheld the Satisfaction of Judgment without exercising any of the default provisions.

Hawaii Research Center

The Company entered into a lease for laboratory and office space on May 9, 2006. This lease amended on September 7, 2011, and October 30, 2012. This lease expires on October 31, 2014. Total rent expense under this agreement as amended was $17,012 and $32,622, for the three and six-month periods ended June 30, 2014, respectively. Total rent expense under this agreement as amended was $16,832 and $37,724, for the three and six-month periods ended June 30, 2013, respectively.

Manoa Innovation Center

The Company entered into an automatically renewable month-to-month lease for office space on August 13, 2010. Under the terms of this lease, the Company must provide a written notice 45 days prior to vacating the premises. Total rent expense under this agreement as amended was $8,465 and $15,430, for the three and six-month periods ended June 30, 2014, respectively. Total rent expense under this agreement as amended was $11,150 and $20,036, for the three and six-month periods ended June 30, 2013, respectively.

Maturities

Future minimum lease payments under non-cancelable operating leases were $12,252, at June 30, 2014. This amount was all due during 2014.