Quarterly report pursuant to Section 13 or 15(d)

Note 7 - Commitments and Contingencies

v3.20.2
Note 7 - Commitments and Contingencies
9 Months Ended
Sep. 30, 2020
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

7. Commitments and Contingencies

 

In addition to the commitments and contingencies described elsewhere in these notes, see below for a discussion of the Company's commitments and contingencies as of September 30, 2020.

 

Lease Obligations Payable

 

During the nine months ended September 30, 2020, the Company did not enter into any lease arrangements requiring any additional right-of-use assets or liabilities to be recorded.

 

The following summarizes quantitative information about the Company's operating leases for the three and nine months ended September 30, 2020 and 2019, respectively (in thousands):

 

   

Three Months Ended September 30,

   

Nine Months Ended September 30,

 
   

2020

   

2019

   

2020

   

2019

 

Lease cost:

                               

Operating lease cost

  $ 29     $ 15     $ 87     $ 31  

Short-term lease cost

    4       12       13       38  

Variable lease cost

    7       7       22       19  

Total

  $ 40     $ 34     $ 122     $ 88  

 

The Company recorded approximately $10,000 and $31,000 in sublease income from a related party for the three and nine months ended September 30, 2020, respectively. Sublease income is recorded as other income, net on the Company's condensed consolidated statement of operations and comprehensive loss.

 

Other supplemental cash flow information for operating leases is as follows (in thousands):

 

   

Three Months Ended September 30,

   

Nine Months Ended September 30,

 
   

2020

   

2019

   

2020

   

2019

 

Cash paid for amounts included in the measurement of lease liabilities:

                               

Operating cash flows from operating leases

  $ 34     $ 20     $ 100     $ 41  

Right-of-use assets obtained in exchange for lease liabilities:

                               

Operating leases

  $     $ 212     $     $ 321  

 

At September 30, 2020, future minimum liabilities under ASC 842 for the Company's operating leases were as follows (in thousands):

 

Maturity of lease liabilities

 

As of September 30, 2020

 

2020 (remaining three months)

  $ 34  

2021

    138  

2022

    105  

2023

    56  

2024

    10  

2025 and thereafter

     

Total lease payments

    343  

Less: imputed interest

    (39 )

Present value of operating lease liabilities

  $ 304  

 

As of September 30, 2020, the weighted average remaining lease term for operating leases is 2.7 years, and the weighted average discount rate is 9.6%. The interest rate implicit in lease contracts is typically not readily determinable and as such, the Company uses an incremental borrowing rate based on a peer analysis using information available at the commencement date, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment.

 

Licenses

 

MD Anderson - Total expenses related to the Company's license agreements with MD Anderson were $61,000 and $60,000 for the three months ended September 30, 2020 and 2019, respectively, and $183,000 and $180,000 for the nine months ended September 30, 2020 and 2019, respectively.

 

HPI - On March 16, 2020, the Company entered into two agreements with a related party, Houston Pharmaceuticals, Inc. (HPI). The first agreement, which has a term of two years, continues a prior consulting arrangement with HPI on the Company's licensed molecules and requires payments for $43,500 per quarter to HPI. The second agreement, which can be cancelled with sixty days' notice by either party, allows the Company's employees access to laboratory equipment owned by HPI for a payment of $15,000 per quarter to HPI. Total expenses related to the Company's agreements with HPI were $59,000 and zero for the three months ended September 30, 2020 and 2019, respectively, and $226,000 and $75,000 for the nine months ended September 30, 2020 and 2019, respectively.

 

Sponsored Research Agreements with MD Anderson - MBI entered into a Sponsored Laboratory Study Agreement with MD Anderson expiring in October 2021. The expenses recognized under this MD Anderson agreement with regards to the Sponsored Laboratory Study Agreement were $212,000 and $177,000 for the three months ended September 30, 2020 and 2019, respectively, and $537,000 and $366,000 for the nine months ended September 30, 2020 and 2019, respectively.