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Note 7 - Lease Obligations and Other Contingencies

9 Months Ended

Sep. 30, 2020

Leases of Lessor Disclosure [Text Block]

Note 7 – Lease Obligations and Other Contingencies

The Company leases certain assets under operating leases, which primarily consisted of real estate leases, laboratory equipment leases and office equipment leases at September 30, 2020. Certain operating leases provide for renewal options, which can vary by lease. The right-of-use asset and lease liabilities on the Company’s Consolidated Balance Sheets represent payments over the lease term, which includes renewal options for certain real estate leases that we are likely to exercise. As part of the Company’s assessment of the lease term, the Company elected the hindsight practical expedient, which allows companies to use current knowledge and expectations when determining the likelihood to extend lease options. Renewal options for the Company’s leases range from 1 to 5 years in length and begin from 2023 through 2026. At September 30, 2020, the weighted average lease term for the Company’s operating leases was 13.7 years. The discount rate used in the calculation of the Company’s right-of-use asset and lease liability was determined based on the stated rate within each contract when available, or the Company’s collateralized borrowing rate from lending institutions. The weighted average discount rate for the Company’s operating leases was 12.8%.

The Company has not made any residual value guarantees related to its operating leases; therefore, the Company has no corresponding liability recorded on its Consolidated Balance Sheets.

Aggregate lease expense under operating leases was $1,321 and $1,064 for the nine-month periods ended September 30, 2020 and September 30, 2019, respectively. Certain operating leases include rent escalation provisions, which the Company recognizes as expense on a straight-line basis. Lease expense for leases with an initial term of twelve months or less was not material.

Future lease payments for assets under operating leases as of September 30, 2020, are as follows:

*Remaining Maturities of Lease Liabilities*
Year Ending December 31,	*Operating Leases*
2020	$	403
2021		851
2022		746
2023		608
2024		577
Thereafter		7,908
Total lease payments		11,093
Less imputed interest		6,249
Total	$	4,844

Of the Company’s total lease liability, $925 is a current liability and $3,919 is a long-term liability at September 30, 2020. The current and long-term portions of the Company’s lease liability are presented within “Accrued expenses” and “Other non-current liabilities” on the Consolidated Balance Sheets. The Company’s right-of-use asset balance associated with operating leases totaled $3,646 at September 30, 2020. This amount is presented within “Other long-term assets” on the Consolidated Balance Sheets.