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Note 10 - Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2023
Notes to Financial Statements |
Commitments and Contingencies Disclosure [Text Block] | NOTE 10. COMMITMENTS AND CONTINGENCIES Indemnification Agreements As permitted under Delaware law and in accordance with its bylaws, the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that limits its exposure and may enable it to recover a portion of any future payments. The Company believes the fair value of these indemnification agreements is minimal. Accordingly, it has not recorded any liabilities for these agreements as of September 30, 2023 or December 31, 2022. In the normal course of business, the Company provides indemnification of varying scope under its agreements with other entities, typically its clinical research organizations, investigators, clinical sites, suppliers, and others. Pursuant to these agreements, it generally indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified parties in connection with the use or testing of its products or product candidates or with any U.S. patent or any copyright or other intellectual property infringement claims by any third party with respect to its products. The term of these indemnification agreements is generally perpetual. The potential future payments the Company could be required to make under these indemnification agreements is unlimited. Historically, costs related to these indemnification provisions have been immaterial. The Company also maintains various liability insurance policies that limit its exposure. As a result, it believes the fair value of these indemnification agreements is minimal. Accordingly, the Company has not recorded any liabilities for these agreements as of September 30, 2023 or December 31, 2022. Legal Matters From time to time, the Company is subject to various legal proceedings, as well as demands, claims and threatened litigation, that arise in the normal course of our business. The ultimate outcome of any litigation or other legal dispute is uncertain. When a loss related to a legal proceeding or claim is probable and reasonably estimable, the Company accrues its best estimate for the ultimate resolution of the matter. If one or more legal matters are resolved against the Company in a reporting period for an amount above expectations, the Company’s financial condition and operating results for that period may be adversely affected. As of September 30, 2023 and December 31, 2022, there were no legal matters that, in the opinion of management, would ultimately result in liability that would have a material adverse effect on the Company’s financial position, results of operations or cash flows. Any outcome, whether favorable or unfavorable, may materially and adversely affect the Company due to legal costs and expenses, diversion of management attention and other factors. The Company expenses legal costs in the period incurred. The Company cannot provide assurance that additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against it in the future, and these matters could relate to prior, current, or future transactions or events. Leases The Company leases office space for its corporate headquarters located in Emeryville, California. The initial lease term was scheduled to expire on February 28, 2022, but on January 19, 2022, the Company exercised its option to extend the term and amended the lease to extend the term through July 31, 2027. The Company also leases 19,136 square feet of space located in Riverside, Missouri, which it utilizes for light manufacturing, storage, distribution of products and administrative functions. The lease commenced on October 1, 2019 and expires on December 31, 2024. In calculating the present value of the minimum lease payments, the Company utilized its incremental borrowing rate. The Company has elected to account for each lease component and its associated non-lease components as a single lease component and has allocated all of the contract consideration across lease components only. This will potentially result in the initial and subsequent measurement of the balances of the right-of-use assets and lease liability for leases being greater than if the policy election was not applied. The leases include variable components (e.g., common area maintenance) that are paid separately from the monthly base payment based on actual costs incurred and therefore were not included in the right-of-use assets and lease liability, but are reflected as an expense in the period incurred. The components of lease expense for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
Lease Costs |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Operating lease cost |  | $ | 130 |  |  | $ | 120 |  |  | $ | 391 |  |  | $ | 395 |
Other information |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operational cash flow used for operating leases |  | $ | 145 |  |  | $ | 144 |  |  | $ | 397 |  |  | $ | 399 |
The Company has measured its operating lease liabilities at its incremental borrowing rate over the remaining term for each operating lease. The weighted average remaining lease term and the weighted average discount rate are summarized as follows:
|  | September 30, 2023 |  |  | September 30, 2022 |
Weighted-average remaining lease term (in years) |  |  | 3.6 |  |  |  | 5.0 |
Weighted-average discount rate |  |  | 5 | % |  |  | 5 | %
Future lease payments under non-cancelable leases as of September 30, 2023 were as follows (in thousands):
2023 |  | $ | 146 |
2024 |  |  | 557 |
2025 |  |  | 439 |
2026 |  |  | 444 |
2027 |  |  | 290 |
Total future minimum lease payments |  |  | 1,876 |
Less imputed interest |  |  | (147 | )
Total |  | $ | 1,729 |
Reported as: |  |  |  |
Operating lease liabilities |  | $ | 485 |
Operating lease liabilities- non-current |  |  | 1,244 |
Total |  | $ | 1,729 |

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