a) Finance Lease Obligations

 

In 2015, the Company entered into an equipment finance lease to purchase three Tecan machines (automated liquid handling robots) for €550,454 Euros. As of June 30, 2019, the balance payable was $91,053.

 

In 2016, the Company entered into a real estate finance lease with ING Asset Finance Belgium S.A. (“ING”) to purchase a property located in Belgium for €1.12 million Euros. As of June 30, 2019, the balance payable was $671,793.

 

In 2018, the Company entered into a finance lease with BNP Paribas leasing solutions to purchase a freezer for the Belgium facility for €25,000 Euros. The leased equipment is amortized on a straight-line basis over 5 years. As of June 30, 2019, the balance payable was. $24,298.

 

The following is a schedule showing the future minimum lease payments under finance leases by years and the present value of the minimum payments as of June 30, 2019.

 

2019 - remaining		$	82,236
2020		$	116,108
2021		$	70,836
2022		$	62,584
2023		$	61,155
Greater than 5 years		$	512,155
Total		$	905,074
Less: Amount representing interest		$	(117,930	)
Present Value of minimum lease payments		$	787,144

 

b) Operating Lease Right-of-Use Obligations

 

The Company adopted Topic 842 on January 1, 2019. The Company elected to adopt this standard using the optional modified retrospective transition method and recognized a cumulative-effect adjustment to the condensed consolidated balance sheet on the date of adoption. Comparative periods have not been restated. With the adoption of Topic 842, the Company’s condensed consolidated balance sheet now contains the following line items: Operating lease right-of-use assets, Current portion of operating lease liabilities and Operating lease liabilities, net of current portion.

 

As all the existing leases subject to the new lease standard were previously classified as operating leases by the Company, they were similarly classified as operating leases under the new standard. The Company has determined that the identified operating leases did not contain non-lease components and require no further allocation of the total lease cost. Additionally, the agreements in place did not contain information to determine the rate implicit in the leases, so we used our incremental borrowing rate as the discount rate. Our weighted average discount rate is 4.45% and the weighted average remaining lease term is 24 months.

 

As of June 30, 2019, operating lease right-of-use assets and liabilities arising from operating leases were $179,158 and $180,146, respectively. During the six months ended June 30, 2019, cash paid for amounts included for the measurement of lease liabilities was $25,171 and the Company recorded operating lease expense of $28,306.

 

The following is a schedule showing the future minimum lease payments under operating leases by years and the present value of the minimum payments as of June 30, 2019.

 

2019 - remaining		$	41,900
2020		$	83,756
2021		$	50,064
2022		$	14,838
Total Operating Lease Obligations		$	190,558
Less: Amount representing interest		$	(10,412	)
Present Value of minimum lease payments		$	180,146

 

The Company’s office space leases are short-term and the Company has elected under the short-term recognition exemption not to recognize them on the balance sheet. During the six months ended June 30, 2019, $87,335 was recognized in short-term lease costs associated with office space leases. The annual payments remaining for short-term office leases were as follows:

 

2019 - remaining		$	79,587
2020		$	13,347
Total Lease Obligations		$	92,934

 

c) Grants Repayable

 

In 2010, the Company entered into an agreement with the Walloon Region government in Belgium for a colorectal cancer research grant for €1.05 million Euros. Per the terms of the agreement, €314,406 Euros of the grant is to be repaid by instalments over the period from June 30, 2014 to June 30, 2023. The Company has recorded the balance of €733,614 Euros to other income in previous years as there is no obligation to repay this amount. In the event that the Company receives revenue from products or services as defined in the agreement, it is due to pay a 6% royalty on such revenue to the Walloon Region. The maximum amount payable to the Walloon Region, in respect of the aggregate of the amount repayable of €314,406 Euros and the 6% royalty on revenue, is twice the amount of funding received. As of June 30, 2019, the grant balance repayable was $178,969.

 

In 2018, the Company entered into an agreement with the Walloon Region government in Belgium for a colorectal cancer research grant for €605,000 Euros. Per the terms of the agreement, €181,500 Euros of the grant is to be repaid by instalments over 12 years commencing in 2020. In the event that the Company receives revenue from products or services as defined in the agreement, it is due to pay a 3.53% royalty on such revenue to the Walloon Region. The maximum amount payable to the Walloon Region, in respect of the aggregate of the amount repayable of €181,500 Euros and the 3.53% royalty on revenue, is equal to the amount of funding received. As of June 30, 2019, the grant balance repayable was $202,404.

 

As of June 30, 2019, the total grant balance repayable was $381,373 and the annual payments remaining were as follows:

 

2019 - remaining		$	39,795
2020		$	53,552
2021		$	50,603
2022		$	47,867
2023		$	49,052
2024 - Greater than 5 years		$	140,504
Total Grants Repayable		$	381,373

 

d) Long-Term Debt

 

In 2016, the Company entered into a 7-year loan agreement with Namur Invest for €440,000 Euros with a fixed interest rate of 4.85%. As of June 30, 2019, the principal balance payable was $368,743.

 

In 2016, the Company entered into a 15-year loan agreement with ING for €270,000 Euros with a fixed interest rate of 2.62%. As of June 30, 2019, the principal balance payable was $264,683.

 

In 2017, the Company entered into a 4-year loan agreement with Namur Invest for €350,000 Euros with a fixed interest rate of 4.00%. As of June 30, 2019, the principal balance payable was $243,541.

 

In 2017, the Company entered into a 7-year loan agreement with SOFINEX for up to €1 million Euros with a fixed interest rate of 4.50%. As of June 30, 2019, €1 million Euros has been drawn down under this agreement and the principal balance payable was $1,136,993.

 

In 2018, the Company entered into a 4-year loan agreement with Namur Innovation and Growth for €500,000 Euros with fixed interest rate of 4.00%. As of June 30, 2019, the principal balance payable was $504,910.

 

As of June 30, 2019, the total balance for long-term debt payable was $2,518,870 and the payments remaining were as follows:

 

2019 - remaining		$	307,650
2020		$	683,708
2021		$	612,326
2022		$	453,910
2023		$	356,511
Greater than 5 years		$	375,818
Total		$	2,789,923
Less: Amount representing interest		$	(271,053	)
Total Long-Term Debt		$	2,518,870

 

e) Collaborative Agreement Obligations

 

In 2015, the Company entered into a research sponsorship agreement with DKFZ in Germany for a 3-year period for €338,984 Euros. As of June 30, 2019, $85,274 is still to be paid by the Company under this agreement.

 

In 2016, the Company entered into a research co-operation agreement with DKFZ in Germany for a 5-year period for €400,000 Euros. As of June 30, 2019, $227,400 is still to be paid by the Company under this agreement.

 

In 2016, the Company entered into a collaborative research agreement with Munich University in Germany for a 3-year period for €360,000 Euros. As of June 30, 2019, $166,001 is still to be paid by the Company under this agreement.

 

In 2017, the Company entered into a clinical study research agreement with the University of Michigan for a 3-year period for up to $3 million. As of June 30, 2019, up to $1.50 million is still to be paid by the Company under this agreement.

 

In 2018, the Company entered into a research collaboration agreement with the University of Taiwan for a 3-year period for a cost to the Company of up to $2.55 million payable over such period. As of June 30, 2019, $2.04 million is still to be paid by the Company under this agreement.

 

On May 1, 2019, the Company entered into a research collaboration agreement with the University of Taiwan to collect a total of 1,200 samples for a 2-year period for a cost to the Company of up to $320,000 payable over such period. As of June 30, 2019, $320,000 is still to be paid by the Company under this agreement.

 

As of June 30, 2019, the total amount to be paid for future research and collaboration commitments was approximately $4.34 million and the annual payments remaining were as follows:

 

2019- remaining		$	2,228,250
2020		$	1,121,925
2021		$	988,500
Total Collaborative Agreement Obligations		$	4,338,675

 

f) Legal Proceedings

 

There are no legal proceedings which the Company believes will have a material adverse effect on its financial position.