Annual report pursuant to Section 13 and 15(d)

Note 13 - Leases

v3.20.1
Note 13 - Leases
12 Months Ended
Dec. 31, 2019
Notes to Financial Statements  
Leases of Lessee Disclosure [Text Block]
1
3
.
Leases
 
We currently lease approximately
5,000
square feet of office space at
4995
Bradenton Avenue, Dublin, Ohio, as our principal offices, at a monthly base rent of approximately
$3,000.
The current lease term expires in
June 2020
with an option to extend for an additional
three
years. In
March 2020,
we executed an amendment to extend the lease term through
June 2023
at a monthly base rent of approximately
$3,000.
 
We also leased approximately
2,000
square feet of office space at
560
Sylvan Avenue, Englewood Cliffs, New Jersey, at a monthly base rent of approximately
$3,000.
The lease for the New Jersey office space expired on
March 31, 2019
and we did
not
renew.
 
In addition, we currently lease approximately
25,000
square feet of office space at
5600
Blazer Parkway, Dublin, Ohio, formerly our principal offices, at a monthly base rent of approximately
$26,000
during
2019.
The current lease term expires in
October 2022
with an option to extend for an additional
five
years. The Company does
not
intend to renew this lease. In
June 2017,
the Company executed a sublease arrangement for the Blazer space, providing for monthly sublease payments to Navidea of approximately
$39,000
through
October 2022.
 
We also currently lease a vehicle at a monthly payment of approximately
$300,
expiring in
September 2021,
and office equipment at a monthly payment of approximately
$100,
expiring in
October 2024.
 
We adopted ASU
2016
-
02,
Leases (Topic
842
)
effective
January 1, 2019.
The following table summarizes the impact of the adoption of ASU
2016
-
02
on our balance sheet at
January 1, 2019.
 
   
Operating
Lease Right-
of-Use Assets
   
Operating
Lease
Liabilities
   
Terminated
Lease
Liability
   
Deferred
Rent
 
Pre-adoption balance
  $
    $
    $
589,173
    $
2,587
 
Change
   
406,842
     
998,602
     
(589,173
)
   
(2,587
)
Post-adoption balance
  $
406,842
    $
998,602
    $
    $
 
 
Total operating lease expense was
$229,000
for the year ended
December 31, 2019.
Sublease income was
$378,000
for the year ended
December 31, 2019,
and was recorded in selling, general and administrative expenses. Prior to the implementation of ASU
2016
-
02,
total rental expense related to our operating leases was
$68,000
for the year ended
December 31, 2018.
 
The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of
December 31, 2019.
 
Maturity of Lease Liabilities
 
Operating
Lease
Payments
 
2020
  $
320,662
 
2021
   
308,407
 
2022
   
254,966
 
2023
   
1,626
 
2024
   
1,355
 
Total undiscounted operating lease payments
   
887,016
 
Less imputed interest
   
124,119
 
Present value of operating lease liabilities
  $
762,897
 
 
Balance Sheet Classification
 
 
 
 
Current lease liabilities
  $
250,553
 
Noncurrent lease liabilities
   
512,344
 
Total operating lease liabilities
  $
762,897
 
 
Other Information
 
 
 
 
Weighted-average remaining lease term for operating leases (in years)
   
2.7
 
Weighted-average discount rate for operating leases
   
10.9
%
 
An initial right-of-use lease asset of
$407,000
was recognized as a non-cash asset addition with the adoption of ASU
2016
-
02.
The discount rates used for each lease were based principally on the Platinum debt, which was secured and outstanding for most of
2018.
A “build-up” method was utilized where the approach was to estimate the risk/credit spread priced into the debt rate and then adjust that for the remaining term of each lease. Additionally, some market research was completed on the Company’s peer group as identified for purposes of compensation analysis. Cash paid for amounts included in the present value of operating lease liabilities was
$330,000
during the year ended
December 31, 2019
and is included in operating cash flows.