Note 5 - Commitments and Contingencies

Commitments and contingencies are described below and summarized by the following table:


	Total		2019		2020		2021		2022		2023		Thereafter

Clinical research and trial obligations		6,162,000		6,162,000		—		—		—		—		—
Biologics License Application ("BLA") consulting services		1,135,000		1,135,000		—		—		—		—		—
Facility lease		1,925,000		246,000		335,000		345,000		355,000		364,000		280,000
	$	9,222,000	$	7,543,000	$	335,000	$	345,000	$	355,000	$	364,000	$	280,000

Clinical Research and Trial Obligations

In March 2019, the Company entered into a contract with a clinical research organization in connection with the upcoming clinical trial for Ampion, which has an outstanding commitment of $6.2 million. When the trial commences, the Company will pay an upfront payment of $0.9 million, which is expected to be paid during the second quarter of 2019.

Biologics License Application (“BLA”) Consulting Services

In March 2018, Ampio entered into a BLA consulting services agreement, which has an outstanding commitment of $1.1 million. This contract is an open-ended contract and the Company incurs costs as sections of the BLA are drafted for the complete submission of the BLA to the U.S. Food and Drug Administration (“FDA”). The Company has incurred $77,000 against the contract as of March 31, 2019.

Facility Lease

In December 2013, Ampio entered into a 125-month non-cancellable operating lease for office space and a manufacturing facility. The effective date for the lease was May 1, 2014. The initial base rent of the lease was $23,000 per month. The total base rent over the term of the lease is approximately $3.3 million, which includes rent abatements and leasehold incentives. As discussed within Note 1, the Company adopted the FASB issued ASU 2016-02, “Leases (Topic 842)” as of January 1, 2019. With the adoption of ASU 2016-02, the Company recorded an operating right-of-use asset and an operating lease liability on the balance sheet. The right-of-use asset represents the Company’s right to use the underlying asset for the lease term and the lease obligation represents the Company’s commitment to make the lease payments arising from the lease. Right-of-use lease assets and obligations are recognized at the commencement date based on the present value of remaining lease payments over the lease term. As the Company’s lease does not provide an implicit rate, the Company used an estimated incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. Rent expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectations regarding the terms. The lease liability is classified between current and long-term on the balance sheet.

The following table provides a reconciliation of the Company’s undiscounted payments for its facility lease and the carrying amount of the lease liability presented in the balance sheet as of March 31, 2019:


	Facility Lease Payments

Remaining Facility Lease Payments	$	1,925,000
Less: Discount Adjustment		(277,000)
Total lease liability		1,648,000

Lease liability - current portion		241,000

Long-term lease liability		1,407,000

Amortization expense related to the right-of-use asset for the respective periods is as follows:

Prior to the adoption of ASU 2016-02, the Company recognized deferred rent when the straight-line rent expense exceeded the actual lease payments and reduced deferred rent when the actual lease payments exceeded the straight-line rent expense. Deferred rent was also classified between current and long-term on the balance sheet.

Rent expense for the respective periods is as follows:


	Three Months Ended March 31,
	2019		2018

Rent expense	$	66,000	$	65,000

Three Months Ended March 31,

Right-of-use Asset Amortization Expense