6. COMMITMENTS AND CONTINGENCIES Leases Capricor leases space for its corporate offices from The Bubble Real Estate Company, LLC pursuant to a lease that was originally effective for a two-year period beginning July 1, 2013 with an option to extend the lease for an additional twelve months. Capricor subsequently entered into several amendments extending the term of the lease and modifying its terms. On January 11, 2019, Capricor entered into a Fourth Amendment to Lease (the Fourth Lease Amendment) with The Bubble Real Estate Company, LLC. Under the terms of the Fourth Lease Amendment, the lease term extension commenced on January 1, 2019 and will end on December 31, 2019 with a base rent of $25,867 per month. The Company delivered to the landlord an unconditional, irrevocable, transferrable letter of credit effective April 1, 2019 in the amount of $232,803 to cover payments of rent for the remainder of the lease term. We are considering various options with respect to our office lease, which may include, extending our lease period, extending on a month-to-month basis, if possible, or finding a short-term lease in a different location. Capricor leases facilities from Cedars-Sinai Medical Center (CSMC) pursuant to a lease (the Facilities Lease) that was originally effective for a three-year period beginning June 1, 2014. Capricor has subsequently entered into several amendments extending the term of the lease and modifying its terms. From August 1, 2017 through March 1, 2019, total monthly rent was $19,756. Effective March 1, 2019, the square footage of the leased premises was reduced, resulting in a rent reduction of approximately $4,000 per month. In July 2019, Capricor exercised an option to extend the term of the Facilities Lease for an additional 12-month period through July 31, 2020 with a monthly lease payment of $15,805. The Company has a further option to extend the Facilities Lease through July 31, 2021. In addition, Capricor entered into a month-to-month lease agreement with University Center Lane Tenant, LLC, pursuant to which Capricor leased office space located in San Diego, California. The lease commenced March 1, 2018 and the rental payment was $4,190 per month. The Company terminated the lease effective February 28, 2019. Included within the table below, future minimum rental payments to related parties totaled $158,050. A summary of future minimum rental payments required under operating leases as of September 30, 2019 is as follows: Years ended Operating Leases 2019 (3 months) $ 125,016 2020 $ 110,632 Expenses incurred under operating leases to unrelated parties for the three months ended September 30, 2019 and 2018 were $77,601 and $83,785, respectively, and $239,803 and $244,835 for the nine months ended September 30, 2019 and 2018, respectively. Expenses incurred under operating leases to related parties for each of the three months ended September 30, 2019 and 2018 were $47,415 and $59,268, respectively, and $150,147 and $177,804 for the nine months ended September 30, 2019 and 2018, respectively. Legal Contingencies The Company is not a party to any material legal proceedings at this time. From time to time, the Company may become involved in various legal proceedings that arise in the ordinary course of its business or otherwise. Accounts Payable Over the normal course of business, disputes with vendors may arise. If a vendor dispute payment is probable and able to be estimated, we will record an estimated liability. Employee Severances In the first quarter of 2019, the Board of Directors approved severance packages for all current full-time employees based on length of service and position ranging up to six months of their base salaries subject to certain conditions. No liability has been recorded as of September 30, 2019.