Note 5 - Leases

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

5. Leases

In March 2017, the Company entered into an operating facility lease agreement for approximately 34,500 rentable square feet located at the 1020 Marsh Facility. The lease commenced in August 2017 for a period of 87 months with one renewal option for a five-year term. The Company did not include the renewal option period as the Company determined it was not reasonably certain the lease would be renewed as of the modification date.

In August 2020, the Company entered into a lease agreement in North Carolina for approximately 4,128 square feet for office space. The monthly lease payments will be approximately $9 thousand per month for a period of 63 months with a three-month rent abatement period.  The lease commenced in the fourth quarter of 2020.

The Company’s rent expense including both short-term and variable lease components of $0.1 million associated with the facility leases was $0.5 million and $0.4 million for the three months ended March 31, 2022 and 2021, respectively. Cash paid for amounts included in the measurement of lease obligations for operating cash flows from operating leases was $0.7 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, the Company’s operating leases had a weighted average remaining lease term of 2.7 years and a weighted average discount rate of 7.64%, which approximates the Company’s incremental borrowing rate.

As of March 31, 2022, minimum lease payments under non-cancelable operating leases by period were expected to be as follows (in thousands):

Year Ending December 31,
2022 (9 months remaining)	$	2,222
2023		3,039
2024		2,619
2025		116
2026		31
Total future minimum lease payments		8,027
Less: discount		(2,240	)
Total lease liabilities	$	5,787

1020 Marsh Facility Sublease

On June 8, 2021, the Company entered into an operating sublease with a subtenant (the “Subtenant”) for the 1020 Marsh Facility. The final agreement and consent received from the landlord was obtained on July 13, 2021. The term of the sublease has commenced on August 1, 2021 and continues through October 31, 2024, unless the master lease is terminated earlier due to a breach by Subtenant. Subtenant will also pay to the Company, as additional rent, an amount equal to the Company’s share of operating expenses attributable to the subleased premises due under the master lease. The terms entered into for this sublease agreement did not result in an impairment of the Company’s long-lived assets for the three months ended March 31, 2022. Lease income associated with this sublease is recorded in other income in the accompanying consolidated statements of operations. The Company has recorded lease income associated with this sublease of approximately $0.7 million for the three months ended March 31, 2022. During the three months ended March 31, 2022, cash received from the Subtenant was $0.7 million, which amount was included in operating cash flows.

Future base rent the Subtenant shall pay to the Company over the sublease term as of March 31, 2022, are as follows (in thousands):

Year Ending December 31,
2022 (9 months remaining)	$	1,734
2023		2,372
2024		2,029
Total	$	6,135