Note 5 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

5. Commitments and Contingencies

In July 2015, the Company entered into a manufacturing services agreement with Lonza Ltd (“Lonza”) for the processing, development and manufacturing 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 June 30, 2016, the Company has executed one purchase order for 1.9 million Swiss Francs for the manufacturing of one batch which commenced in June 2016 and is expected to finish in the third quarter of 2016. In connection with this transaction, the Company has executed a purchase order of 0.3 million Swiss Francs related to Lonza's acquisition of raw materials. Of these purchase obligations, the Company has reflected 1.0 million and 0.3 million Swiss Francs, respectively, approximately $1.3 million in aggregate at current exchange rates, within accrued expenses on our consolidated balance sheet as of June 30, 2016. In addition, management has executed a purchase order for 7.6 million Swiss Francs, approximately $7.8 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 June 30, 2016 are summarized as follows (in thousands):

Year Ending December 31:	Amount
2016	$	84
2017		168
2018		84
Total minimum lease payments	$	336

Rental expense for the six months ended June 30, 2016 and 2015 was $91,000 and $93,000, 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 June 30, 2016, the Company has provided a security deposit in the amount of $14,000 to the lessor.

At June 30, 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 June 30, 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.