Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 5 – COMMITMENTS AND CONTINGENCIES

Lease Agreements

The Company’s operating leases are comprised solely of operating facility leases. The Company did not have any finance leases as of March 31, 2021 and December 31, 2020.

Balance sheet information related to the Company’s leases is presented below:

		As of
Operating leases:	Balance sheet location	March 31, 2021		December 31, 2020
Right-of-use assets	Other assets	$	1,037	$	1,060
Operating lease liability, current	Operating lease liability, current	$	92	$	88
Operating lease liability, non-current	Operating lease liability, non-current	$	974	$	999

The following provides details of the Company’s lease expense:

Lease cost	For the three months ended March 31, 2021		For the three months ended March 31, 2020
Operating lease cost	$	55	$	20
Short-term lease cost		61		59
Total	$	116	$	79

Other information related to leases is presented below:

	As of March 31, 2021			As of December 31, 2020
Other information
Weighted-average discount rate – operating lease		12.00	%		12.00	%
Weighted-average remaining lease term – operating lease (in months)		84			87

For the three months ended March 31, 2021 and 2020, the Company’s operating cash flows used for operating leases was $52 and $0.

As of March 31, 2021, the expected annual minimum lease payments of the Company’s operating lease liabilities were as follows:

For Years Ending December 31,	Operating lease
2021 (excluding the three months ended March 31, 2021)	$	159
2022		216
2023		220
2024		224
2025		229
Thereafter		532
Total operating lease payments		1,580
Less: imputed interest		514
Present value of future minimum lease payments	$	1,066

On December 1, 2020, the Company entered into a long-term lease for office space for a term of seven years. The office space is owned by an affiliate of Deerfield Management Company, L.P., which together with its affiliates beneficially owned more than 5% of the Company’s voting securities at the time the lease was executed. Management determined that the lease terms were on an arms-length basis.

Subsequent to the quarter ended March 31, 2021, on April 2, 2021, the Company met the criteria to commence accounting for the operating lease arrangement described above. The lease expires in May 2028 and includes approximately $8.2 million of legally binding minimum lease payments. The Company is in the process of completing its accounting for this operating lease arrangement, including determining the incremental borrowing rate to discount the remaining lease payments associated with the lease liability and right-of-use asset. The Company estimates that upon commencement the Company’s recognition of this lease will result in a right-of-use asset and operating lease liability of approximately $6.0 million.

Litigation

From time to time, Protara may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. Management is of the opinion that the ultimate outcome of these matters would not have a material adverse impact on the financial position of the Company or the results of its operations.

In the normal course of business, the Company enters into contracts in which it makes representations and warranties regarding the performance of its services and that its services will not infringe on third party intellectual rights. There have been no significant events related to such representations and warranties in which the Company believes the outcome could result in losses or penalties in the future.