Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

Commitments and Contingencies
3 Months Ended
Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies



Operating Leases


We lease space under operating leases for manufacturing and laboratory facilities and administrative offices in Cleveland, Ohio, as well as administrative offices in New York, New York. We also lease office space in Madrid, Spain as well as certain office equipment under operating leases, which have a non-cancelable lease term of less than one year and therefore, we have elected the practical expedient to exclude these short-term leases from our right-of-use assets and lease liabilities. We can terminate the operating leases for our manufacturing and laboratory facilities and administrative offices in Cleveland early at December 31, 2020 and pay for unamortized tenant improvements.


Components of lease cost are as follows:


    For the three months ended March 31,  
    2020     2019  
Operating lease cost   $ 434,000     $ 289,000  
Variable lease cost   $ 83,000     $ 73,000  
Short-term lease cost   $ 18,000     $ 47,000  


The following table presents information about the amount and timing of cash flows arising from operating leases as of March 31, 2020:


Maturity of lease liabilities:      
2020, remainder   $ 1,275,000  
2021     1,713,000  
2022     1,727,000  
2023     1,741,000  
2024     1,781,000  
Thereafter     1,885,000  
Total undiscounted operating lease payments     10,122,000  
Less: imputed interest     2,407,000  
Present value of operating lease liabilities   $ 7,715,000  
Balance sheet classification:      
Current portion of lease liability   $ 1,702,000  
Long-term lease liability     6,013,000  
Total operating lease liabilities   $ 7,715,000  
Other information:      
Weighted-average remaining lease term for operating leases   70 months  
Weighted-average discount rate for operating leases     9.6 %


We have engaged a contract manufacturer to assist us with developing and defining the processes necessary to manufacture our RDEB product candidate. We had a remaining commitment of $6.3 million at March 31, 2020. The amount is payable based on the completion of specific activities outlined in the contracted project plan; we expect to spend the entire $6.3 million in 2020.


We are not currently subject to any material pending legal proceedings as of March 31, 2020.