Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

Legal Proceedings

The Company may be subject to legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on its financial position, results of operations or liquidity.

On February 20, 2018, New Enterprises, Ltd. ("New Enterprises") filed a lawsuit against the Company and Roth Capital Partners, LLC ("Roth") in the U.S. District Court for the District of Arizona, alleging nine counts against the Company, including claims of common law fraud and securities fraud to induce the chairman of New Enterprises into investing in the Company; failure to register New Enterprises' requested transfer; breach of stock certificates and the lock-up contract; tortious interference with prospective business advantage; and conversion. New Enterprises sought monetary damages, including compensatory damages, punitive damages, and attorney's fees. After initial motions to dismiss and written discovery, the parties reached a settlement, and the lawsuit was dismissed with prejudice on December 27, 2019. Outside of the litigation, Roth made a claim for indemnification to the Company based on contractual indemnification agreements, and the parties have resolved Roth's indemnity claim.

Lease Commitments

The Company is obligated under finance leases for certain research and computer equipment that expire on various dates through July 2023. At December 31, 2019, the gross amount of office and computer equipment, and research equipment and the related accumulated amortization recorded under the finance leases was $498 and $275, respectively.

In February 2012, the Company entered into an operating lease for its then corporate headquarters in Flagstaff, Arizona. The lease was originally due to expire in January 2015. In December 2013, the Company amended its lease to expand into the remaining area in the building and extended the term to December 31, 2019. In February 2014, the Company further amended the lease to expand into an adjacent building. The lease requires escalating rental payments over the lease term. Minimum rental payments under the operating lease are recognized on a straight-line basis over the term of the lease and accordingly, the Company records the difference between the cash rent payments and the recognition of rent expense as a deferred rent liability. The lease is guaranteed by the former President of the Company. In December 2019, we extended the current lease for only our manufacturing facilities are located in Flagstaff, Arizona, occupying a total of 7,632 square feet of space. The lease for our manufacturing facilities expires in December 2020.

On November 16, 2016, we leased an additional 1,954 square feet of research and development space, also in Flagstaff. This lease expired on November 15, 2018 but was extended for an additional 24 months, through November 2020. A subsequent amendment to the lease allows for the Company to cancel the lease at any time through the lease term with 30 days notice. The Company provided a 30 day cancellation notice effective February 2020.

On December 1, 2019, we entered into a lease for our corporate headquarters in Phoenix, Arizona where we lease and occupy approximately 5,529 square feet of office space. This lease expires in November 2024.

We believe that our existing facilities are adequate and meet our current needs for business, manufacturing and research.

Rent expense was $253 and $242 for the year ended December 31, 2019 and 2018, respectively. The future minimum lease payments under non-cancellable operating lease and future minimum finance lease payments as of December 31, 2019 are follows:

	Finance Leases		Operating Lease
Years Ending December 31,
2020		78		256
2021		63		136
2022		33		138
2023		3		141
2024		—		132
Total minimum lease payments	$	177	$	803

	Finance Leases
Less: amounts representing interest (6.39%, ranging from 10.48% to 11.56%)	$	(22	)
Present value of minimum lease payments		155
Less: current installments under finance lease obligations		(65	)
Total long-term portion	$	90