Commitments

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments

4. Commitments

Operating and Finance Leases

The Company leases its corporate space in Minneapolis, Minnesota. In September 2017, the Company entered into a non-cancelable operating lease agreement for building space. The new lease commenced, and the Company moved to the facility in May 2018, in conjunction with the termination of its then existing lease. Rent expense is recorded on a straight-line basis over the lease term. In July 2020, the Company signed an amendment to extend this lease through April 30, 2022. The lease amendment provides for monthly rent, real estate taxes and operating expenses. As a result of the lease amendment, the Company recorded an incremental $197,211 in the operating right-of-use (“ROU”) asset and lease liability. In July 2021, the Company signed the second amendment to extend this lease through April 30, 2023. This amendment provides for monthly rent, real estate taxes and operating expenses. The Company recorded an incremental $193,517 in the operating right-of-use (“ROU”) asset and lease liability pertaining to this amendment. The second amendment also includes the option to extend the term for one additional year. The option to extend is at the Company’s discretion and because the Company has not determined if the option to extend will be exercised, the extended lease term is not included in the ROU assets and lease liabilities. The Company regularly evaluates the renewal options and when it is reasonably certain of exercise, the Company will include the renewal period in its lease term.

In May 2018, the Company entered into a non-cancelable finance lease agreement for office equipment with a five-year term. The underlying assets are included in furniture and equipment. The lease contains a bargain purchase option at the end of the lease.

When an implicit rate is not provided, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

Supplemental balance sheet information consisted of the following at March 31, 2022:

Operating Lease
Right-of-use assets	$	194,925
Operating lease liability	$	204,595
Less: short term portion		(189,267	)
Long term portion	$	15,328
Finance Lease
Furniture and equipment	$	28,932
Less: Accumulated depreciation		(22,181	)
Net book value of property and equipment under finance lease	$	6,751
Finance lease liability	$	6,841
Less: short term portion		(5,860	)
Long term portion	$	981

Maturity analysis under lease agreements consisted of the following as of March 31, 2022:

	Operating Leases			Finance Leases
2022	$	152,394		$	5,441
2023		68,080			3,023
Total minimum lease payments		220,474			8,464
Less: Present value discount		(15,879	)		(30	)
Less amount representing services		-			(1,593	)
Present value of net minimum lease payments	$	204,595		$	6,841

	Remaining Lease Term		Discount Rate
Weighted Average
Operating lease		1.1 years		6.0	%
Finance lease		1.2 years		1.0	%

Lease costs for the period ended March 31, 2022:

	Three-month period
Operating lease cost	$	48,557
Finance lease cost:
Amortization		1,447
Interest		14
Variable lease cost		20,269
	$	70,287

Supplemental cash flow information related to leases period ended March 31, 2022:

	Three-month period
Cash paid for amounts included in operating and finance leases:
Operating cash outflow from operating leases	$	68,885
Operating cash outflow from finance leases		14
Financing cash outflow from finance leases		1,458
	$	70,357

Clinical Research Studies

The Company enters into contracts in the normal course of business for clinical trials, preclinical studies, manufacturing and other services and products for operating purposes. The Company currently has five Phase 2 clinical trial agreements in place to evaluate targeted therapies selected with one of our CELsignia tests. The Company also has a license agreement in place with Pfizer to research, develop, manufacture and commercialize gedatolisib. In conjunction with the license agreement, the Company continued a Phase 1b study – B2151009 related to gedatolisib. These patients subsequently transitioned to an Expanded Access study – CELC-G-001. Timing of milestone payments related to the Phase 2 clinical trials are uncertain and the contracts generally provide for termination following a certain period after notice, therefore the Company believes that non-cancelable obligations under the agreements are not material. Contracts related to the Phase 1b study, the Expanded Access study, and the Phase 3 clinical study to date, are generally based on time and material.