Note 8 - Leases

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

8. Leases

The Company’s operating lease obligations primarily consist of leased office, laboratory, and manufacturing space under a non-cancelable operating lease. In addition to the minimum future lease commitments presented below, the lease requires the Company to pay property taxes, insurance, maintenance, and repair costs. The lease includes a rent holiday concession and escalation clauses for increased rent over the lease term. Rent expense is recognized using the straight-line method over the term of the lease.

The lease will expire on November 30, 2024. The Company is obligated to pay approximately $5.8 million in base rent payments through November 2024, beginning on December 1, 2019. The weighted average remaining lease term as of December 31, 2022 is 1.9 years.

The operating lease was included on the balance sheet at the present value of the future base payments discounted at a 6.5% discount rate using the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment as the lease does provide an implicit rate.

The Company’s operating lease expense, excluding variable maintenance fees and other expenses on a monthly basis, was approximately $105,000. Rent expense for each of the years ended December 31, 2022 and 2021 was approximately $1.3 million. The Company’s variable expenses for the years ended December 31, 2022 and 2021 was approximately $0.3 million and $0.2 million, respectively. Operating right-of-use asset amortization for the year ended December 31, 2022 and 2021 was approximately $1.1 million and $1.0 million, respectively. Due to payments being made in excess of operating lease expense recognized, the Company recorded approximately $65,000 and $158,000 as prepaid rent included in other assets on the balance sheet as of December 31, 2022 and 2021, respectively.

The following table presents the future operating lease payments and leasehold liability included on the balance sheet related to the Company’s operating lease as of December 31, 2022 (in thousands):

Year Ending December 31,
2023	$	1,203
2024		1,138
Total		2,341
Less: Imputed interest		(147	)
Leasehold liability as of December 31, 2022	$	2,194

The following table shows ROU assets and lease liabilities, and the associated financial statement line items (in thousands):

		December 31,
Lease-Related Assets and Liabilities	Financial Statement Line Items	2022		2021
Right of use assets:
Operating lease	Right of use asset	$	2,194	$	3,179
Total right of use assets		$	2,194	$	3,179
Lease liabilities:
Operating lease	Leasehold liability, current portion	$	1,092	$	985
	Leasehold liability, long-term portion		1,102		2,194
Total lease liabilities		$	2,194	$	3,179