Fixed Assets

9 Months Ended

Sep. 30, 2022

Fixed Assets

Fixed Assets

Note 3 – Fixed Assets

Fixed assets are recorded based on acquisition cost and once placed in service, are depreciated utilizing the straight-line method over their estimated economic useful lives. Leasehold improvements are accreted over the shorter of the estimated economic life or related lease term.

In accordance with ASC Topic 360, Property, Plant and Equipment, the Company assesses all of its long-lived assets for impairment when impairment indicators are identified. Based on the assessment at September 30, 2022, the Company recorded a non-cash impairment related to its long-lived assets which was triggered by the Company’s announcement during the current reporting period that it was discontinuing further development of its lead pipeline asset, Ampion. The Company utilized a market valuation approach for determining the fair value of the ROU asset and a combination of the indirect cost approach and market approach for determining the fair value of the long-lived fixed assets. Based on this analysis, we concluded that the carrying value of the assets exceeded its undiscounted cash flows, and, as such, an impairment loss, calculated as the difference between carrying value and fair value, was deemed necessary. Accordingly, the Company recorded a $1.6 million impairment loss during the quarter ended September 30, 2022 through

accumulated depreciation and operating expenses in its statement of operations. Fixed assets, net of accumulated depreciation, consist of the following:

	Estimated
	Useful Lives
	(in Years)	September 30, 2022		December 31, 2021
Leasehold improvements	10	$	6,357,000	$	6,075,000
Manufacturing facility/clean room	3 - 8		2,984,000		2,984,000
Lab equipment and office furniture	5 - 8		1,739,000		1,739,000
Fixed assets, gross			11,080,000		10,798,000
Accumulated depreciation			(10,713,000)		(8,234,000)
Fixed assets, net		$	367,000	$	2,564,000

Depreciation and amortization expense for the respective periods is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Depreciation and amortization expense	$	347,000	$	263,000	$	865,000	$	831,000