Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies [Abstract]

(5)	Commitments and Contingencies

(a)

Operating Leases

As of December 31, 2023, the Company has the right of use for its facilities located in Suwanee, GA under a long-term operating lease agreement, as amended (Lease Agreement), which expires April 2029. The Company has the option (Extension Option) to extend the term for one consecutive term of five years each at the greater of the then current prevailing rental rate or current base rent rate, as agreed by both parties, and upon certain terms and conditions. The Company must provide written notice of its intent to exercise this extension option at between nine and 12 months prior to the expiration date of April 2029. Under the terms of the lease agreement, the Company’s monthly rent is subject to increases on an annual basis. As of December 31, 2023, the Company’s monthly rent payment was $47,029.

Operating right-of-use assets and lease liabilities consist of the following as of December 31:

		2023				2022
Lease right-of-use assets		$	2,380,225				307,761

Lease liabilities:	2023		2022
Lease liabilities – current portion	$	406,636		357,640
Lease liabilities – long-term portion		2,036,067		28,584
Total	$	2,442,703		386,224

As of December 31, 2023 and 2022, the weighted average discount rate for all operating leases with initial terms of more than one year was approximately 10% and the weighted average remaining term for operating leases was 5.3 years and 1.1 years, respectively.

The operating lease agreement for the Company’s facility includes non-lease costs, such as common area maintenance, which are recorded as variable lease costs. Operating lease expenses are included in general and administrative expenses in the Company’s statements of comprehensive loss and are summarized as follows for the years ending December 31:

Lease cost:	2023		2022
Operating lease cost	$	469,995		485,598
Short-term lease cost		6,917		5,730
Variable lease cost		78,367		41,198
Total	$	555,279		532,526

The following table summarizes the Company’s undiscounted cash payment obligations for its operating lease liabilities with initial terms of more than twelve months as of December 31, 2023:

Operating leases:
2024	$	451,750
2025		629,340
2026		654,514
2027		680,694
2028		707,922
2029		243,835
Total undiscounted lease payments -operating leases		3,368,055
Less: imputed interest		(925,352)	)
Lease liability		2,442,703
Less: current portion of lease liability		(406,636)	)
Lease liability, less current portion	$	2,036,067

(b)

Financing Leases

As of December 31, 2022, the Company had the right of use for certain leasehold improvements and office equipment at its facility located in Suwanee, GA. Lease expense was recognized as payment of financing lease, depreciation expense and interest expense. The financing leases ended during 2023.

Financing right-of-use assets and lease liabilities consist of the following as of December 31, 2022:

	2022
Lease right-of-use assets	$	150,122
Accumulated depreciation		(138,326	)
Net	$	11,796

Lease liabilities:	2022
Lease liabilities – current portion	$	16,193
Lease liabilities – long-term portion		—
Total	$	16,193

As of December 31, 2022, the weighted average discount rate for all financing leases with initial terms of more than one year was approximately 10%, and the weighted average remaining term for financing leases was 0.7 years. During 2023, the finance leases reached the end of their lease terms. Depreciation expense associated with the Company’s financing leases was $11,796 and $18,283 for the years ended December 31, 2023 and 2022, respectively. Interest expense associated with the financing leases was $599 and $2,892 for the years ended December 31, 2023 and 2022, respectively.

(c)

Clinical Trial Agreements (CTAs)

As part of the regulatory approval process for taking its products to market or conducting post-market clinical studies to support marketing efforts for products with regulatory clearance, the Company enters into a CTA to compensate each participating medical institution and physician. Generally, upon executing a CTA with a participating medical institution or physician, the Company pays a fee for review board approval that usually requires annual renewals and one time site startup costs. As individual patients are enrolled in the clinical trial by the participating medical institution or physician, the Company pays certain per patient fees according to the CTA for the duration of the trial. Expenses incurred in connection with these CTA activities are expensed as services are provided and are included in research and development expenses on the accompanying statements of comprehensive loss.

(d)

Legal Claims

Occasionally, the Company may be a party to legal claims or proceedings of which the outcomes are subject to significant uncertainty. In accordance with ASC 450, Contingencies, the Company will assess the likelihood of an adverse judgment for any outstanding claim as well as ranges of probable losses. When it has been determined that a loss is probable and the amount can be reasonably estimated, the Company will record a liability. For the years ended December 31, 2023 and 2022, there were no material legal contingencies requiring accrual or disclosure.

The Company, as permitted under Delaware law and in accordance with its bylaws, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director who is or was serving at the Company’s request in such capacity. The Company entered into employment agreements with its officers, which provides for indemnification protection in the executive’s capacity as an officer for actions taken within the scope of employment. The maximum amount of potential future indemnification is unlimited; however, the Company has obtained director and officer insurance that limits its exposure. The Company believes the fair value for these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations as of December 31, 2023 and 2022.