7. Leases and Commitments

Right-of-use Asset and Liability

The Company has a single non-cancelable operating lease for approximately 6,000 square feet of office space in Austin, Texas, which is used for the development of novel products. On September 4, 2020, the Company entered into a lease amendment that extended the lease termination date to April 30, 2024 and set new rental rates effective as of January 1, 2021. Future lease payments are (in thousands).



For the year ending December 31,
2021	$	66
2022		102
2023		107
2024		36
Total future lease payments		311
Less: imputed interest		(18)
Total	$	293

Rent expense was $0.1 million for the year ended December 31, 2020 and 2019.

The Company recorded a right-of-use asset and lease liability of $316,000 as a result of the lease modification in September 2020. The Company utilized a discount rate of 3.25% for the modified lease to determine the present value of the future lease payments, which approximated the Company’s incremental borrowing rate in September 2020. There were no right-of-use assets exchanged for operating lease liabilities during the year ended December 31, 2019.

Cash paid for operating lease liabilities totaled $99,000 and $95,000 during the years ended December 31, 2020 and 2019, respectively.

Other Commitments

The Company conducts its product research and development programs through a combination of internal and collaborative programs that include, among others, arrangements with universities, contract research organizations and clinical research sites. It has contractual arrangements with these organizations, however these contracts are cancelable on thirty days’ notice and the Company’s obligations under these contracts are largely based on services performed.

The Company is dependent on contract development and manufacturing organizations for the manufacture of all our materials for clinical studies.