Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

Leases

The Company has three operating leases for real estate in California and Maryland:

• Carlsbad, California – corporate offices with a term date of February 2020 and leased from a related party (see also Note 7),

• Oceanside, California – primary research facility and laboratory space with a term date of December 2021 with the Company’s option to terminate the lease on January 1, 2020 upon a six-month advanced notice,

• Frederick, Maryland – mixed laboratory and administrative space with a term date of November 2025.

These operating leases are included in "right-of-use assets" on the Company's September 30, 2019 balance sheet and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments is included in “operating lease liabilities, current” and “operating lease liabilities, net of current portion” on the Company's September 30, 2019 balance sheet. Operating lease right-of-use assets and liabilities commencing after January 1, 2019 are recognized at commencement date based on the present value of lease payments over the lease term. As of September 30, 2019, total right-of-use assets and operating lease liabilities were approximately $784,000 and $1,165,000, respectively. All operating lease expense is recognized on a straight-line basis over the lease term. 

As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would expect to pay to borrow on a collateralized and fully amortizing basis over a similar term an amount equal to the lease payments in a similar economic environment.

Information related to the Company's right-of-use assets and related lease liabilities were as follows (in thousands):

	Three months ended September 30, 2019		Nine months ended September 30, 2019
Operating lease costs	$	117	$	370
Cash paid for operating lease liabilities		124		360
Right-of-use assets obtained in exchange for new operating lease obligations		—		1,389
Weighted-average remaining lease term (years)				4.99
Weighted average discount rate				17.55	%

Maturities of lease liabilities as of September 30, 2019 were as follows :
2019 (remaining months)	$	125
2020		368
2021		347
2022		220
2023		226
Thereafter		473
		1,759
Less: present value adjustments		(594	)
Total lease liabilities	$	1,165
Current operating lease liabilities	$	236
Non-current operating lease liabilities		929
Total operating lease liabilities	$	1,165

Future minimum lease payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2018, are as follows (in thousands):

	Amount
2019	$	491
2020		368
2021		347
2022		220
2023		227
Thereafter		454
Total	$	2,107

Licensed Patents

The Company has a minimum annual license fee of $75,000 payable in two installments per year to Astellas Pharma pursuant to the amended UMass IP license agreement and is noncancelable.

Customer Concentration

During the nine months ended September 30, 2019 for the biomedical market segment, two customers accounted for 39% and 13%, respectively, of consolidated revenues. During the nine months ended September 30, 2018 for the biomedical market segment, two customers accounted for 33% and 27%, respectively, of consolidated revenues. No other single customer accounted for more than 10% of revenues for any period presented.

Vendor Concentration

During the nine months ended September 30, 2019, no single vendor accounted for more than 10% of consolidated purchases, while during the same periods in 2018 one vendor accounted for approximately 25% of consolidated purchases.