Annual report pursuant to Section 13 and 15(d)

Note 9 - Operating Lease

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Note 9 - Operating Lease
12 Months Ended
Dec. 31, 2020
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]
9.
Operating Lease
 
We lease certain office space under a non-cancelable operating lease. This lease does
not
have significant rent escalation holidays, concessions, leasehold improvement incentives or other build-out clauses. Further this lease does
not
contain contingent rent provisions. This lease terminates on
August 31, 2022
and we do
not
have an option to renew. This lease does include both lease (e.g., fixed rent) and non-lease components (e.g., common-area and other maintenance costs). The non-lease components are deemed to be executory costs and are therefore excluded from the minimum lease payments used to determine the present value of the operating lease obligation and related right-of-use asset.
 
This lease does
not
provide an implicit rate and, due to the lack of a commercially salable product, we are generally considered unable to obtain commercial credit. Therefore, considering the quoted rates for the lowest investment-grade debt and the interest rates implicit in recent financing leases, we estimated our incremental borrowing rate to be
9%.
We used our estimated incremental borrowing rate and other information available at the lease commencement date in determining the present value of the lease payments.
 
Our operating lease cost and variable lease costs were
$66,000
and
$53,000,
respectively, for the year ended
December 31, 2020.
Variable lease costs consist primarily of common area maintenance costs, insurance and taxes which are paid based upon actual costs incurred by the lessor.
 
Maturities of our operating lease obligation are as follows as of
December 31, 2020 (
in thousands):
 
2021
  $
68
 
2022
   
46
 
Total lease payments
  $
114
 
Less interest portion
   
(9
)
Present value of lease obligation
  $
105