Note 8 - Leases

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

NOTE 

8.

  Leases

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

six

operating lease agreements,

one

of which has been subleased, and for equipment under an operating lease agreement with an initial term 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

November 2020 

under a lease that terminates on

September 30, 2025,

with

no

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

June 2015

that was scheduled to terminate on

April 30, 2020,

with a

five

-year extension option that the Company exercised in

July 2019,

extending the lease until

April 30, 2025.

The right of use of these premises was assessed as partially impaired as of

December 31, 2019 (

see Note

15

). Further, the Company obtained, via the Merger in

February 2018,

the right of use of facilities located in Alpharetta, Georgia, 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 has the right of use of

two

facilities located in South San Francisco, California, under leases that terminate on

July 31, 2021,

with

no

extension options, and the right of use of equipment under a lease that terminates in

September 2021.

Further, the Company has identified an embedded lease for the rental of facilities in Burlingame, California, within a Statement of Work for the manufacture of bulk vaccine product that is expected to be completed early in

2022.

As of

December 31, 2020,

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

one

year was

9.94%

and the weighted average remaining term of these leases was

4.07

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 

December 31, 2020 (

in thousands):

Year Ending December 31,	Amount
2021	$	2,633
2022		1,801
2023		1,585
2024		1,641
2025		1,112
Undiscounted total		8,772
Less: imputed interest		(1,564	)
Present value of future minimum payments		7,208
Current portion of operating lease liability		(2,052	)
Operating lease liability, net of current portion	$	5,156

The Company presently has

no

finance leases and

no

future obligations under operating leases for equipment with initial terms of

one

year or less.

Certain operating lease agreements for facilities include non-lease costs, such as common area maintenance, which are recorded as variable lease costs. Operating lease expenses for the years ended

December 31, 2020

 and

2019,

are summarized as follows (in thousands):

	Year Ended December 31,
	2020			2019
Lease cost
Operating lease cost	$	1,145		$	959
Short-term lease cost		13			15
Variable lease cost		264			162
Sublease income		(217	)		(217	)
Total lease cost	$	1,205		$	919

Net cash outflows associated with operating leases totaled

$1,111,000

and

$983,000

in the years ended

December 31, 2020

and

2019,

respectively.

When the Company subleased its facilities located in Alpharetta, Georgia, for less than it is required to pay under the head lease, it recorded a lease loss charge of

$253,000

on the cease-use date in the

three

months ending

December 31, 2018,

which, along with the related impairment of property and equipment (see Note

5

), was recorded as a component of costs of exit from leased premises within operating expenses.

Liabilities related to costs of exit from leased premises are summarized as follows (in thousands):

Balance as of January 1, 2018	$	—
Costs of exit from leased premises		359
Deferred rent on cease-use date		19
Impairment of property and equipment		(106	)
Cash paid, net of receipts		(41	)
Accretion charges, included in rent expense		2
Balance as of December 31, 2018	$	233

Prior to

December 31, 2018,

rent expense was recognized on a straight-line basis over the noncancelable term of each operating lease and, accordingly, the Company recorded the difference between cash rent payments and the recognition of rent expense as a deferred rent liability, which was included within accrued expenses. Rent expense was

$875,000

for the year ended

December 

31,

2018.