NOTE 6 – 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:

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

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.