Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Commitments and Contingencies

v3.19.3
Note 5 - Commitments and Contingencies
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
Note
5.
  Commitments and Contingencies
 
Leases
We currently operate
one
facility located in the United States and
one
facility located in the Peoples Republic of China both of which are classified as operating leases.
 
Our corporate offices and primary research facilities are located in Germantown, Maryland, where we lease approximately
1,500
square feet. This lease provides for monthly payments of approximately
$5,700
per month. This lease has an original term of
12
months and expires on
December 31, 2019.
We did
not
establish ROU assets or lease liabilities for this short-term lease.
 
We also lease approximately
11,300
square feet of research facility in the People’s Republic of China. This lease commenced in
September 2019,
provides for minimum lease payments of approximately
$4,400
per month, expires in
September 2024
and provides us with a future
first
right of refusal for extending the lease beyond its expiration. This lease currently represents our lone long-term operating lease.
 
Our long-term operating lease and related sublease for our San Diego facility both terminated in
August 2019.
We recognized other income of approximately
$86,100
from this sublease for the
nine
months ended
September 30, 2019.
 
We recognized total rent expense of approximately
$164,500
and
$134,100
in the
nine
months ended
September 30, 2019
and
2018,
respectively. Included in the
2019
expense is approximately
$83,900
relating to our short-term leases. Lease costs, net of sublease income, for the
nine
months ended
September 30, 2019
consisted of the following:
 
Operating lease cost   $
141,300
 
Variable lease cost    
23,200
 
Sublease income    
(86,100
)
Total net lease cost   $
78,400
 
 
In the
nine
months ended
September 30, 2019,
we established approximately
$204,300
of ROU assets as the result of entering into new lease arrangements. 
 
At
September 30, 2019,
we have approximately
$204,300
of right of use asset included in ROU and Other Assets and approximately
$183,500
of lease liability the current portion of which is included in Other Current Assets and the long term portion of which is included in Lease Liability, Net of Current Portion in our consolidated balance sheets. The lease liability was calculated using a discount rate of
12.75%.
 
Maturities of our lone long-term operating lease as of
September 30, 2019
were as follows:
 
Future undiscounted cash flows:    
Remainder 2019   $
11,845
 
2020    
52,482
 
2021    
53,498
 
2022    
55,118
 
2023    
56,920
 
2024    
13,390
 
Total    
243,253
 
Discount factor    
(59,733
)
Lease liability    
183,520
 
Less current liability    
(30,888
)
Non-current lease liability   $
152,632
 
Other
From time to time, we are parties to legal proceedings that we believe to be ordinary, routine litigation incidental to the business. We are currently
not
a party to any litigation or legal proceeding.