Note 7 - Leases

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

NOTE 

7

.  

Leas

es

The Company has obtained the right of use for office and manufacturing facilities under

five

operating lease agreements,

one

of which has been subleased, and for equipment under

three

operating lease agreements with initial terms exceeding

one

year and under

three

operating lease agreements with initial terms of

one

year or less.

The Company obtained the right of use of real estate located in South San Francisco, California, in

June 2015

that terminates on

April 30, 2020,

with a

five

-year extension option. The Company also obtained, via the Merger, the right of use of facilities located in Alpharetta, Georgia, in

February 2018

that terminates on 

February 28, 2021,

with

no

extension option. These facilities were subleased for the remainder of the lease term effective

November 30, 2018.

In addition, the Company obtained the right of use of facilities located in South San Francisco, California, under

three

leases that terminate on

August 31, 2019,

with

no

extension options, and the right of use of equipment under

three

leases that terminate between

July 

2019

and

September 2021.

As of

June 30, 2019

, the weighted average discount rate for operating leases with initial terms of more than

one

year was

10.5%

and the weighted average remaining term of these leases was

1.32

years. Discount rates were determined using the Company’s marginal rate of borrowing at the time each lease was executed or extended.

The following table summarizes the Company’s undiscounted cash payment obligations for its operating lease liabilities with initial terms of more than

twelve

months as of

June 30, 2019 (

in thousands):

Year Ending December 31,
2019 (excluding the six months ended June 30, 2019)	$	361
2020		414
Thereafter		58
Undiscounted total		833
Less: imputed interest		(52	)
Present value of future minimum payments		781
Current portion of operating lease liability		(565	)
Operating lease liability, net of current portion	$	216

In addition, future obligations under operating leases for equipment with initial terms of

one

year or less totaled

$1,000.

The Company presently has

no

finance leases.

Certain operating lease agreements include non-lease costs, such as common area maintenance, which are excluded from operating lease costs. Operating lease expenses for the

three

and

six

months ended

June 30,

2019

, are summarized as follows:

	Three Months Ended			Six Months Ended
	June 30, 2019			June 30, 2019
Lease cost	(in thousands)
Operating lease cost	$	222		$	445
Short-term lease cost		4			7
Sublease income		(55	)		(109	)
Total lease cost	$	171		$	343

Net cash outflows associated with operating leases totaled

$200,000

and

$399,000

in the 

three

and

six

months ended

June 30,

2019

, respectively. Rent expense was and

$222,000

and

$368,000

for the 

three

and

six

months ended

June 30,

2018

, respectively.

Future minimum payments and sublease income under operating leases as of

December 

31,

2018,

were as follows:

Year Ending December 31,	Lease Payments		Sublease Income
	(in thousands)
2019	$	859	$	213
2020		411		219
2021		56		38
Thereafter		—		—
Total	$	1,326	$	470