Note 4 - Lease Obligations and Other Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Text Block]

Note 4 — Lease Obligations and Other Contingencies

The Company has the following minimum payments under operating lease obligations that existed at December 31, 2015:

2016	$	651
2017		871
2018		870
2019		820
2020		651
Thereafter		3,045
Total minimum payments	$	6,908

The obligations in the preceding table are primarily related to the Company’s leases for buildings in Birmingham, Alabama and Durham, North Carolina. The lease for the Company’s headquarters in Durham, North Carolina expires June 30, 2020. The lease for the existing facility in Birmingham, Alabama currently expires on June 30, 2016; however, in 2015, the Company leased an additional approximate 32,000 square feet in Birmingham to house its new research facility. The Company began construction on leasehold improvements for its new research facility in 2015 and this lease obligates the Company for $4,839 of lease payments into 2027. Rent expense for operating leases was $664, $633, and $526 in 2015, 2014, and 2013, respectively.

Lease Financing Obligation

Based on the terms of the lease agreement for the new research facility in Birmingham, Alabama, the Company had construction period risks during the construction period and the Company was deemed the owner of the building (for accounting purposes only) during the construction period. Accordingly, the Company recorded an asset of $1,589, representing the Company’s leased portion of the building and recorded a corresponding liability. Upon completion of leasehold improvement construction, the Company will not meet the sale-leaseback criteria for de-recognition of the building asset and liability. Therefore, the lease is accounted for as a financing obligation. The asset will be depreciated over the expected duration of the lease, and rental payments will be treated as principal and interest payments on the lease financing obligation liability. The underlying accounting for this transaction has no impact on cash flows associated with the underlying lease and or construction in process.

At December 31, 2015, the lease financing obligation balance was $2,375 and was recorded as a long term liability on the consolidated balance sheets. The remaining future minimum payments under the lease financing obligation are $4,839.