Note G - Commitments and Contingencies |
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Text Block] |
Legal Matters From time to time, the Company is involved in various legal proceedings arising in the normal course of business. For some matters, a liability is not probable or the amount cannot be reasonably estimated and, therefore, an accrual has not been made. However, for such matters when it is probable that the Company has incurred a liability and can reasonably estimate the amount, the Company accrues and discloses such estimates. As of December 31, 2016, no accruals have been made related to commitments and contingencies. As of December 31, 2015, the Company had accrued $20,000 related to commitments and contingencies.In 2014, a former financial advisor of the Company filed a request with the Iowa District Court to declare valid a purported right of first refusal to serve as the Company’s exclusive financial advisor for specified strategic transactions and to receive fees for the specified strategic transactions irrespective of whether any such specified transaction occurred during or after the term of the financial advisor’s service agreement. This filing by the former financial advisor was made in response to an action initiated by the Company in 2013 seeking a declaratory judgement finding that such purported right was invalid and unenforceable. Two former members of the Company’s board of directors (the “Board”) joined the lawsuit as intervenors based on the former financial advisor’s purported assignment of its rights, or a portion thereof, under the agreement to the intervenors. In September 2015, the court granted summary judgement in favor of the Company with respect to the Company’s declaratory judgement action and the former financial advisor’s counterclaims and the Company separately entered into settlement agreements with each of the intervenors. The settlements reached with the intervenors did not differ from the accrual previously recorded by the Company by a material amount. The former financial advisor subsequently filed a notice of appeal of the court’s ruling with the Supreme Court of Iowa. On January 6, 2016, the Company entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”) with the former financial advisor and Donald DeWaay, Jr. pursuant to which, among other things, the former financial advisor agreed, in exchange for the consideration described therein, to dismiss with prejudice its pending appeal. DeWaay Financial Network’s appeal was subsequently dismissed by the Supreme Court of Iowa on January 7, 2016. The settlement amount was commensurate with the contingency recorded in the books and records of the Company. The consideration in the settlement agreement did not differ from the accrual previously recorded by the Company by a material amount.In November 2016, a stockholder filed a class action suit against the Company in the Iowa District Court in Johnson county alleging that the Company, certain of is senior executives and directors who signed the registration statement in connection with its initial public offering, and each of the investment banks that acted as underwriters for the offering negligently issued untrue statements of material facts and omitted to state material facts required to be stated in the registration statement and incorporated offering materials that the Company filed with the U.S Securities and Exchange Commission in support of the offering. The plaintiff does not quantify any alleged damages in his complaint but, in addition to attorneys' fees and costs, the plaintiff seeks to recover damages and obtain other relief on behalf of himself and all other persons who purchased the Company's common stock pursuant or traceable to the offering and the registration statement and who were allegedly damaged thereby. In January 2017, the suit was removed to the U.S. District Court for the Southern District of Iowa. The plaintiff has since filed a motion to remand the case to the Iowa District Court, and that motion is still pending. The suit is still in a preliminary stage and has not yet been set for trial. As such, the Company unable to predict the timing or outcome of this litigation as of the date of this report.Lease Agreements Iowa The Company leases office and laboratory facilities in Iowa under a non-can celable operating lease. The Company’s lease for its Iowa facilities expires in September 2017 and includes a renewal option that could extend the lease for successive one year terms upon expiration. Florida The Company leases office space in Florida, comprised of two contiguous office suites, under a non-cancelable operating lease, which expires in August 2025 and February 2026, respectively, and includes the right to extend the term of the lease for two successive five Virginia The Company leases office and laboratory facilities in Virginia under a non-cancelable operating lease. In February 2017, the Company modified the lease to expand the amount of office space in the current facility. The Company’s lease for its Virginia facilities expires in August 2017. North Carolina The Company leases office space in North Carolina under a non-cancelable operating lease. The expiration date of the Company ’s lease is May 2020, and includes renewal options that could extend the lease for an additional three years.Capital Lease The Company leases various laboratory equipment, furniture and office equipment and leasehold improvements that are accounted for as capital leases and that require ongoing payments, including interest expense. The capital leases are financed through various financial institutions and are collateralized by the underlying assets. As of December 31, 2016, the interest rates for assets under remaining capital leases were 7.19% and 8.05%. Rent expense for non-cancelable operating and capital leases was $0.6 million, $0.3 million and $0.2 million for the years ended December 31, 2016, 2015 and 2014, respectively.Future minimum lease payments under capital leases and non-cancelable operating leases as of December 31, 2016, were as follows (in thousands):
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