Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Leases

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Note 8 - Leases
3 Months Ended
Mar. 31, 2021
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]
8.
Leases
 
Lessee:
 
The following information pertains to those operating lease agreements where the Company is the lessee. 
 
On
February 1, 2017,
the Company entered into a sublease agreement (the “Sublease”) for approximately
12,400
square feet of building space for the relocation of the Company's corporate headquarters to Englewood, Colorado (the “Sublease Premises”), which was effective as of
January 26, 2017.
The lease term commenced on
June 1, 2017
and was to terminate in
May 2021.
The Company relocated its corporate headquarters from Sunnyvale, California to Englewood, Colorado in
June 2017. 
 
The monthly base rent under the Sublease was equal to
$20.50
per rentable square foot of the Sublease Premises during the
first
year. The monthly base rent was equal to
$21.12
and
$21.75
per rentable square foot during the
second
and
third
years, respectively. In connection with the execution of the Sublease, the Company also agreed to pay a security deposit of approximately
$22,000.
The Company was also provided an allowance of approximately
$88,000
for certain tenant improvements relating to the engineering, design and construction of the Sublease Premises which has been reimbursed.  
 
In
March 2021,
the Company amended the Sublease for its office building space. The lease term was extended for a period of
34
months and will terminate on
March 31, 2024. 
The monthly gross rent for the first,
second
and
third
years of the lease extension is
$21,028,
$21,643
and
$22,258
per month, respectively. The Company was also provided a rent abatement for the month of
June 2021. 
Additionally, the sublandlord has agreed to perform certain construction, repair, maintenance or other tenant improvements to the Subleased Premises with estimated costs of approximately
$19,000.
 
In
September 2018,
the Company entered into a
36
-month noncancelable operating lease agreement for office equipment.  The lease commenced on
September 20, 2018.  
The monthly lease payment is approximately
$3,000.
 
 
Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date the Company takes possession of the property. At lease inception, the Company determines the lease term by assuming the exercise of those renewal options that are reasonably assured. The lease term is used to determine whether a lease is financing or operating and is used to calculate straight-line rent expense. Additionally, the depreciable life of leasehold improvements is limited by the expected lease term. Leases with an initial term of
12
months or less are
not
recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.
 
The following table reflects the Company's lease assets and lease liabilities at
March 31, 2021
and
December 31, 2020 (
in thousands):
 
   
March 31,
   
December 31,
 
   
2021
   
2020
 
                 
Assets:
               
Operating lease right-of-use assets
  $
678
    $
130
 
                 
Liabilities:
               
Current operating lease liabilities
  $
183
    $
132
 
Noncurrent operating lease liabilities
   
495
     
-
 
    $
678
    $
132
 
 
The operating lease right-of-use assets are included in other assets on the condensed consolidated balance sheets. The operating lease liabilities are included in accrued liabilities and other noncurrent liabilities on the condensed consolidated balance sheets.
 
The operating leases expense for the
three
months ended
March 31, 2021
and
2020
was
$73,000
and
$76,000,
respectively.  
 
As of
March 31, 2021,
the maturity of operating lease liabilities was as follows (in thousands):
 
Year Ending December 31,
 
 
 
 
2021 (remaining 9 months)
  $
189
 
2022
   
279
 
2023
   
285
 
2024
   
67
 
Total lease payments
   
820
 
Less: Amount representing interest
   
(142
)
Present value of lease liabilities
  $
678
 
 
The weighted average remaining lease term was approximately
35
months as of
March 31, 2021.
The weighted average discount rate for the
three
months ended
March 31, 2021
was
12.5%.
 
Lessor:
 
The following information pertains to those operating lease agreements where the Company is the lessor. 
 
As of
March 31, 2021,
minimum future rentals from customers on non-cancellable operating leases of Viveve Systems were as follows (in thousands):
 
Year Ending December 31,
 
 
 
 
2021 (remaining 9 months)
  $
274
 
Thereafter
   
-
 
Total
  $
274
 
 
As of
March 31, 2021,
$709,000
of property and equipment is related to these operating lease agreements. The depreciation expense for that property and equipment for the
three
months ended
March 31, 2021
and
2020
is
$110,000
and
$113,000,
respectively.