Quarterly report pursuant to Section 13 or 15(d)

Note 7 - Commitments and Contingencies

v3.21.1
Note 7 - Commitments and Contingencies
3 Months Ended
Mar. 31, 2021
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 March 31, 2021.

 

Lease Obligations Payable

 

The following summarizes quantitative information about the Company's operating leases for the three months ended March 31, 2021 and 2020, respectively (in thousands):

 

   

Three Months Ended March 31,

 
   

2021

   

2020

 

Lease cost:

               

Operating lease cost

  $ 29     $ 29  

Variable lease cost

    7       7  

Short-term lease cost

          4  

Total

  $ 36     $ 40  

 

The Company recorded approximately $10,000 in sublease income from a related party for the three months ended March 31, 2021 and 2020, respectively. Sublease income is recorded as other income, net on the Company's condensed consolidated statement of operations and comprehensive loss. Operating cash flows from operating leases was $34,000 and $33,000 for the three months ended March 31, 2021 and 2020, respectively. 

 

At March 31, 2021, future minimum liabilities under ASC 842 for the Company's operating leases were as follows (in thousands):

 

Maturity of lease liabilities

 

As of March 31, 2021

 

2021 (remaining nine months)

  $ 104  

2022

    105  

2023

    56  

2024

    10  

2025 and thereafter

     

Total lease payments

    275  

Less: imputed interest

    (26 )

Present value of operating lease liabilities

  $ 249  

 

As of March 31, 2021, the weighted average remaining lease term for operating leases is 2.2 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 $38,000 and $61,000 for the three months ended March 31, 2021 and 2020, 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 $108,500 for the three months ended March 31, 2021 and 2020, respectively.

 

Sponsored Research Agreements with MD Anderson - MBI has a Sponsored Laboratory Study Agreement with MD Anderson expiring in October 2021. In February 2021, the Company extended this Agreement until December 31, 2022. The expenses recognized under this MD Anderson agreement with regards to the Sponsored Laboratory Study Agreements were $94,000 and $179,000 for the three months ended March 31, 2021 and 2020, respectively.