Note 5 - Lease Obligations and Other Contingencies

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Leases of Lessor Disclosure [Text Block]

Note 5 — Lease Obligations and Other Contingencies

The Company leases certain assets under operating leases, which primarily consisted of real estate leases, laboratory equipment leases and office equipment leases as of March 31, 2020. The Company accounts for its leases in accordance with ASU 2016-02: Leases (Topic 842).  This ASU requires a lessee to recognize a right-of-use asset and a lease liability on its balance sheet for most operating leases.  Certain operating leases provide for renewal options, which can vary by lease. The right-of-use asset and lease liabilities on the Company’s Consolidated Balance Sheets represent payments over the lease term, which includes renewal options for certain real estate leases that we are likely to exercise. As part of the Company’s assessment of the lease term, the Company elected the hindsight practical expedient, which allows companies to use current knowledge and expectations when determining the likelihood to extend lease options. Renewal options for the Company’s leases range from 1 to 5 years in length and begin from 2023 through 2026. The weighted average lease term for the Company’s operating leases was 13.4 years. The discount rate used in the calculation of the Company’s right-of-use asset and lease liability was determined based on the stated rate within each contract when available, or the Company’s collateralized borrowing rate from lending institutions. The weighted average discount rate for the Company’s operating leases was 12.8%.

The Company has not made any residual value guarantees related to its operating leases; therefore, the Company has no corresponding liability recorded on its Consolidated Balance Sheets.

Aggregate lease expense under operating leases was $452 and $448 for the three months ended March 31, 2021 and 2020, respectively. Certain operating leases include rent escalation provisions, which the Company recognizes as expense on a straight-line basis. Lease expense for leases with an initial term of twelve months or less was not material. Cash paid for amounts included in the measurement of lease liabilities was $440 and $408 for the three months ended March 31, 2021 and 2020, respectively.

Future lease payments for assets under operating leases as of March 31, 2021, are as follows:

Remaining Maturities of Lease Liabilities
Year Ending December 31,	Operating Leases
2021	$	902
2022		805
2023		666
2024		584
2025		582
Thereafter		7,327
Total lease payments		10,866
Less imputed interest		5,982
Total	$	4,884

The Company’s current lease liability as of March 31, 2021 and December 31, 2020 was $1,001 and $1,179, respectively. The Company’s long-term lease liability as of March 31, 2021 and December 31, 2020 was $3,883 and $3,871, respectively. The current and long-term portions of the Company’s lease liability are presented within “Lease financing obligations” on the Consolidated Balance Sheets. The Company’s right-of use asset balance associated with operating leases totaled $3,625 and $3,802 at March 31, 2021 and December 31, 2020, respectively. These amounts are presented within “Other assets” on the Consolidated Balance Sheets. Operating right-of-use assets are recorded net of accumulated amortization of $2,940 and $2,641 as of March 31, 2021 and December 31, 2020, respectively.