Note 5 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Text Block]

Commitments and Contingencies

In July 2015, the Company entered into a manufacturing services agreement with Lonza Ltd for the processing, development and manufacture of the active pharmaceutical ingredient (“API”) in its lead product candidate, vonapanitase. Under the agreement, the Company will execute purchase orders authorizing Lonza to manufacture API batches and will pay for the services and batches in accordance with terms and assumptions in the agreement and to be set forth in a project plan. As of March 31, 2016, the Company has executed one purchase order for $1.9 million (originally denominated in Swiss Francs) for the manufacturing of one batch to commence in July 2016. Management expects to pay $0.3 million to Lonza in the second quarter of 2016 for Lonza’s acquisition of raw materials in connection with this purchase order. In addition, management has executed a purchase order for 7.6 million Swiss Francs, approximately $7.9 million at current exchange rates, for the manufacturing of four batches to commence in June 2017.

Future minimum payments required under operating leases as of March 31, 2016 are summarized as follows (in thousands):

Year Ending December 31:	Amount

2016	$	126
2017		168
2018		84
Total minimum lease payments	$	378

Rental expense for the three months ended March 31, 2016 and 2015 was $45,000 and $47,000, respectively. In addition to the base rent, the Company is also responsible for its share of operating expenses and real estate taxes, in accordance with the terms of the lease agreement. As of March 31, 2016, the Company has provided a security deposit in the amount of $14,000 to the lessor.

At March 31, 2016 and December 31, 2015, the Company had $14,000 in an outstanding letter of credit to be used as collateral for leased premises. At March 31, 2016 and December 31, 2015, the Company pledged an aggregate of $14,000 to the bank as collateral for the letter of credit, which is included in long-term assets and both short-term deposits and long-term assets, respectively.