Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Commitments:

Leases

The Company determines whether an arrangement is a lease at inception. The Company and its subsidiaries have operating leases for certain manufacturing, laboratory, office facilities and certain equipment. The leases have remaining lease terms of less than one year to less than five years. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of September 30, 2021 and December 31, 2020, the Company has no assets recorded under finance leases.

Lease expense for these leases is recognized on a straight-line basis over the lease term. For the three and nine months ended September 30, total lease costs are comprised of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2021		2020		2021		2020
Operating lease cost	$	100	$	93	$	287	$	215
Short-term lease cost		—		—		—		2
Total net lease cost	$	100	$	93	$	287	$	217

Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases.

Other information related to leases was as follows:

(Dollars in thousands)	Nine Months Ended September 30, 2021
Weighted Average Remaining Lease Term (in years):
Operating leases		3.00
Weighted Average Discount Rate:
Operating leases		3.85	%

(Dollars in thousands)	Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020
Supplemental Cash Flows Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	277	$	212
Non-Cash Activity Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	169	$	504

Maturities of noncancellable operating lease liabilities are as follows for the quarter ending September 30:

(Dollars in thousands)
	2021
2021	$	415
2022		405
2023		318
2024		71
2025		—
Total lease payments		1,209
Less: imputed interest		(69	)
Total lease obligations		1,140
Less: current obligations		(378	)
Long-term lease obligations	$	762

As of September 30, 2021, except for the ground lease entered into as described in Note 1, there were no additional operating lease commitments that had not yet commenced.

Warranties

Product warranty liabilities are included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets. Below is a reconciliation of changes in product warranty liabilities:

	Nine Months Ended September 30,
(Dollars in thousands)	2021			2020
Balance, January 1	$	22		$	16
Accruals for warranties issued		12			18
Accruals for pre-existing warranties		—			—
Settlements made (in cash or in kind)		(5	)		(4	)
Balance, end of period	$	29		$	30

Contingencies:

Legal 

The Company is subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. When applicable, the Company accrues for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred.

The Company has been named as a party in the December 19, 2019 United States Environmental Protection Agency (“EPA”) Demand Letter regarding the Malta Rocket Fuel Area Superfund Site (“Site”) located in Malta and Stillwater, New York in connection with an alleged release of hazardous materials into the environment. The EPA is seeking reimbursement of response costs from all named parties in the amount of approximately $358 thousand plus interest in connection with the investigation and disposal activities associated with the various drum caches discovered at the Site, issuance of the Explanation of Significant Differences (“ESD”) of the Site, and implementation of the work contemplated by the ESD. The Company considers the likelihood of a material adverse outcome to be remote and does not currently anticipate that any expense or liability it may incur as a result of these matters in the future will be material to the Company’s financial condition.