Note 13 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

1

3

: COMMITMENTS AND CONTINGENCIES

Lease Commitments

As discussed in Note

3,

we adopted the requirements of ASU

No.

2016

-

02,

Lease Accounting: 

Topic

842

, 

and all related amendments on

January 1, 2019. 

In accordance with Topic

842,

we evaluate all contractual agreements at inception to determine if they contain a lease. We measure lease liabilities at present value of lease payments

not

yet paid, using a discounted cash flow model that requires the use of a discount rate, or incremental borrowing rate.

Our operating lease assets consist of an office lease and a copier system lease. Our office lease expires in 

August

of

2020

and our copier system lease expires in

October

of

2021.

None

of our leases contain options to extend. Total operating lease expense for the year ended

December 

31,

2019,

was approximately

$56,200

 and variable lease payments of taxes and insurance were immaterial.  As of

December 

31,

2019,

the weighted average remaining lease term was approximately

1

year and the weighted average discount rate of our operating leases was

12%.

 As of

December 

31,

2019,

the future minimum lease payments are approximately

$44,200

and

$12,400

for 

2020

and

2021,

respectively. These payments are reported in the consolidated balance sheets at

December 31, 2019, 

net of approximately

$6,100

of imputed interest. The cash paid for amounts included in the measurement of operating lease liabilities for the year ended

December 

31,

2019

was approximately 

$58,800.

Prior to

January 1, 2019,

the Company recorded operating lease rent expense under ASC Topic

840,

Leases

, on a straight-line basis over the non-cancellable lease term. Rent expense for the year ended

December 31, 2018

was approximately

$31,500.

As of

December 31, 2018,

the total future minimum lease payments due were

$42,228,

of which

$14,904

 and

$14,904

were due in

2019

and

2020,

respectively, and

$12,420

was due in

2021.

Litigation and Contingencies

On

October 10, 2013,

a putative securities class action complaint, captioned

Cook v. Atossa Genetics, Inc., et al.

,

No.

2:13

-cv-

01836

-RSM, was filed in the U.S. District Court for the Western District of Washington against us, certain of our directors and officers and the underwriters of our

November 2012

initial public offering. The complaint alleged that all defendants violated Sections

11

and

12

(a)(

2

), and that we and certain of our directors and officers violated Section

15,

of the Securities Act by making material false and misleading statements and omissions in the offering’s registration statement, and that we and certain of our directors and officers violated Sections

10

(b) and

20A

of the Exchange Act and SEC Rule

10b

-

5

promulgated thereunder by making false and misleading statements and omissions in the registration statement and in certain of our subsequent press releases and SEC filings with respect to our NAF specimen collection process, our ForeCYTE Breast Health Test and our MASCT device. The complaint sought, on behalf of persons who purchased our common stock between

November 8, 2012

and

October 4, 2013,

inclusive, damages of an unspecified amount. On

March 23, 2018,

the parties filed a stipulation of settlement with the court to settle the matter for

$3.5

million, completely funded by defendants’ insurers, and on

July 20, 2018

the Court approved the settlement. This case is considered closed.  

We are subject to other legal proceedings and claims that arise in the normal course of business. We believe these matters are either without merit or of a kind that should

not

have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows.