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Commitments and Contingencies
 3 Months Ended
Mar. 31, 2023
Commitments and Contingencies [Absract]  
COMMITMENTS AND CONTINGENCIES

Note 11 – Commitments and Contingencies

 

Operating Leases

 

As of March 31, 2023, the Company had one office lease for the corporate headquarters and laboratory space.

 

On April 15, 2021, the Company executed a lease agreement for corporate office space. The lease commenced on May 14, 2021 when the improvements were completed by the landlord and the Company had access to the facility. The lease term is 40 months, and the base rent is approximately $14,000 per month for the first twelve months, with subsequent escalation provisions for future months. The Company paid a security deposit of approximately $47,000.

 

On April 22, 2022, the Company executed an amendment to its corporate office lease agreement for additional corporate office space. The lease term for the additional space is 36 months from the expansion commencement date of June 23, 2022. The base rent is approximately $5,100 per month for the first twelve months, with subsequent escalation provisions for future months. The Company paid an additional security deposit of approximately $5,500.

 

The balances of the operating lease related accounts as of March 31, 2023 and December 31, 2022 are as follows (in thousands):

 

Operating leases  As of
March 31,
2023		   As of
December 31,
2022		 
Right-of-use assets  $343   $389 
Operating lease liabilities - Short-term  $209   $212 
Operating lease liabilities - Long-term  $168   $214 

 

The components of lease expense and supplemental cash flow information as of and for the three months ended March 31, 2023 and 2022 are as follows (in thousands):

 

   Three Months Ended
March 31,		 
   2023   2022 
         
Lease Cost:        
Operating lease cost  $64   $45 
           
Other Information:          
Cash paid for amounts included in the measurement of lease liabilities for the year ended  $59   $42 
Weighted average remaining lease term - operating leases (in years)   1.6    2.4 
Average discount rate - operating lease   10.00%   10.00%

 

Future minimum lease payments for the operating lease are as follows as of March 31, 2023 (in thousands):

 

2023  $182 
2024   203 
2025   27 
Total lease payments   412 
Less: Interest   (35)
Total operating lease liability  $377 

 

Litigation

 

From time to time, the Company may become involved in various litigation and administrative proceedings relating to claims arising from its operations in the normal course of business. Management is not currently aware of any matters that may have a material adverse impact on the Company’s business, financial position, results of operations or cash flows.

 

Indemnification

 

The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future, but have not yet been made. The Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements.

  

The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual.

 

No amounts associated with such indemnifications have been recorded as of March 31, 2023.

 

Non-cancelable Obligations

 

The Company also had $0.4 million of non-cancelable contractual commitments as of March 31, 2023, primarily related to its vendor arrangements. These commitments are generally due within one to eighteen months.