Quarterly report pursuant to Section 13 or 15(d)

13. COMMITMENTS AND CONTINGENCIES

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13. COMMITMENTS AND CONTINGENCIES
9 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

13. COMMITMENTS AND CONTINGENCIES

 

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

 

There have been no material changes to our contractual obligations and commitments outside the ordinary course of business from those disclosed under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Contractual Obligations and Commitments” as contained in our Annual Report on Form 10-K for the year ended March 31, 2019, filed by us with the SEC on July 1, 2019.

 

LEASE COMMITMENTS

 

We currently lease approximately 2,600 square feet of executive office space at 9635 Granite Ridge Drive, Suite 100, San Diego, California 92123 under a 39-month gross plus utilities lease that commenced on December 1, 2014 and expires on August 31, 2021 the “Granite Ridge Lease.” The current rental rate under the lease extension is $8,265 per month. We believe this leased facility will be satisfactory for our office needs over the term of the lease.

 

We also rent approximately 1,700 square feet of laboratory space at 11585 Sorrento Valley Road, Suite 109, San Diego, California 92121 at the rate of $4,700 per month on a one-year lease that originally was to expire on November 30, 2019. In October 2019, we entered into a lease extension for an additional twelve months running from December 1, 2019 through November 30, 2020, at the rate of $5,961 per month.

 

Rent expense, which is included in general and administrative expenses, approximated $44,000 and $42,000 for the three month periods ended December 31, 2019 and 2018, respectively. For the nine month periods ended December 31, 2019 and 2018, rent expense approximated $130,000 and $126,000, respectively.

 

Future minimum lease payments under the Granite Ridge Lease as of December 31, 2019, are as follows:

 

January 1, 2020 through March 31, 2020   $ 24,795  
April 1, 2020 through March 31, 2021     102,074  
April 1, 2021 through August 31, 2021     43,670  
Total future minimum lease payments     170,539  
Less: discount     (6,132 )
Total lease liability   $ 164,407  

 

On April 1, 2019, we recorded a lease liability and ROU lease asset for the Granite Ridge Lease based on the present value of lease payments over the expected remaining lease term of 2.2 years, discounted using our estimated incremental borrowing rate of 4%. For the nine months ended December 31, 2019, reduction of the right-of-use lease asset was $68,856 and reduction of the lease liability was $67,994.

  

LEGAL MATTERS

 

From time to time, claims are made against us in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from selling one or more products or engaging in other activities.

 

The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods. We are not presently a party to any pending or threatened legal proceedings.