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Commitments

6 Months Ended

Jun. 30, 2021

4. Commitments

Operating and Finance Leases

The Company leases its corporate space in Minneapolis, Minnesota. In September 2017, the Company entered into a non-cancelable operating lease agreement for building space. The new lease commenced, and the Company moved to the facility in May 2018, in conjunction with the termination of its then existing lease. Rent expense is recorded on a straight-line basis over the lease term. In July 2020 the Company signed an amendment to extend this lease through April 30, 2022. The lease amendment provides for monthly rent, real estate taxes and operating expenses. As a result of the lease amendment, the Company recorded an incremental $197,211 in the operating right-of-use (“ROU”) asset and lease liability.

The lease agreement, as amended, includes the option to extend the term for one additional year. The option to extend is at the Company’s discretion and because the Company has not determined if the option to extend will be exercised, the extended lease term is not included in the ROU assets and lease liabilities. The Company regularly evaluates the renewal options and when it is reasonably certain of exercise, the Company will include the renewal period in its lease term.

In May 2018, the Company entered into a non-cancelable finance lease agreement for office equipment with a five-year term. The underlying assets are included in furniture and equipment. The lease contains a bargain purchase option at the end of the lease.

When an implicit rate is not provided, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

Supplemental balance sheet information consisted of the following at June 30, 2021:

Operating Lease
Right-of-use assets	$	142,766

Operating lease liability	$	153,684
Less: short term portion		(153,684	)
Long term portion	$	-

Finance Lease
Furniture and equipment	$	28,932
Less: Accumulated depreciation		(17,841	)
Net book value of property and equipment under finance lease	$	11,091

Finance lease liability	$	11,209
Less: short term portion		(5,830	)
Long term portion	$	5,379

Maturity analysis under lease agreements consisted of the following as of June 30, 2021:
	Operating Leases			Finance Leases
2021	$	97,411		$	3,627
2022		64,940			7,255
2023		-			3,023
Total minimum lease payments		162,351			13,905
Less: Present value discount		(8,667	)		(78	)
Less amount representing services		-			(2,618	)
Present value of net minimum lease payments	$	153,684		$	11,209

Weighted Average	Remaining Lease Term			Discount Rate
Operating lease	0.8 years				4.0	%
Finance lease	1.9 years				1.0	%

Lease costs for the period ended June 30, 2021:
	Three-month Period			Six-month Period

Operating lease cost	$	43,727		$	89,157
Finance lease cost:
Amortization		1,447			2,893
Interest		21			45
Variable lease cost		19,869			39,738
	$	65,064		$	131,833

Supplemental cash flow information related to leases for the period ended June 30, 2021:
	Three-month Period			Six-month Period
Cash paid for amounts included in operating and finance leases:
Operating cash outflow from operating leases	$	66,872		$	135,446
Operating cash outflow from finance leases		21			45
Financing cash outflow from finance leases		1,451			2,900
	$	68,344		$	138,391

Clinical Research Studies

The Company enters into contracts in the normal course of business for clinical trials, preclinical studies, manufacturing and other services and products for operating purposes. The Company currently has five Phase II clinical trial agreements in place to evaluate targeted therapies selected with one of our CELsignia tests. The Company also has a license agreement in place with Pfizer to research, develop, manufacture and commercialize gedatolisib. Timing of milestone payments are uncertain and the contracts generally provide for termination following a certain period after notice, therefore the Company believes that non-cancelable obligations under the agreements are not material.