CERS » Topics » Note 8. Commitments and Contingencies

This excerpt taken from the CERS 10-K filed Mar 13, 2009.

Note 9. Commitments and Contingencies

The Company leases its office facilities and certain equipment under non-cancelable operating leases with initial terms in excess of one year that require the Company to pay operating costs, property taxes, insurance and maintenance. These facility leases generally contain renewal options and provisions adjusting the lease payments if those renewal options are exercised.

 

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Table of Contents

CERUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

 

Future minimum payments under operating leases are as follows (in thousands):

 

Year ending December 31,

    

2009

   $ 1,462

2010

     957

2011

     727

2012

     722

2013

     372

Thereafter

     —  
      

Total minimum lease payments

   $ 4,240
      

Rent expense for office facilities was $1.4 million, $1.5 million and $1.2 million for the years ended December 31, 2008, 2007, and 2006, respectively.

The Company’s total non-cancelable commitments at December 31, 2008 are as follows (in thousands):

 

     Total    Less than
1 year
   1-3 years    4-5 years    After 5
years

Minimum purchase requirements

   $ 3,515    $ 1,608    $ 1,210    $ 697    $ —  

Operating leases

     4,240      1,462      1,684      1,094      —  

Other commitment

     91      22      45      24      —  
                                  

Total contractual obligations

   $ 7,846    $ 3,092    $ 2,939    $ 1,815    $ —  
                                  

Minimum purchase commitments include certain components of INTERCEPT blood safety system which the Company purchases from third party manufacturers and supplies to Fenwal for use in manufacturing finished disposable kits. The Company has paid $1.1 million, $0.9 million, and $0.1 million, for goods under contracts which are subject to minimum purchase commitments during the years ended December, 31, 2008, 2007, and 2006, respectively.

These excerpts taken from the CERS 10-K filed Feb 27, 2008.

Note 8. Commitments and Contingencies

The Company leases its office facilities and certain equipment under non-cancelable operating leases with initial terms in excess of one year that require the Company to pay operating costs, property taxes, insurance and maintenance. These facility leases generally contain renewal options and provisions adjusting the lease payments if those renewal options are exercised. Capital lease obligations represent the present value of future rental payments under capital lease agreements for information technology hardware.

Future minimum payments under operating leases are as follows (in thousands):

 

Year ending December 31,

    

2008

   $ 1,475

2009

     1,041

2010

     496

2011

     286

2012 and thereafter

     286
      

Total minimum lease payments

   $ 3,584
      

Rent expense for office facilities was $1.5 million, $1.2 million and $1.1 million for the years ended December 31, 2007, 2006, and 2005, respectively.

The Company’s total non-cancelable commitments at December 31, 2007 are as follows (in thousands):

 

     Total    Less than
1 year
   1-3 years    4-5 years    After 5
years

Minimum purchase requirements

   $ 1,456    $ 1,406    $ 50    $ —      $ —  

Operating leases

     3,584      1,475      1,537      572      —  
                                  

Total contractual obligations

   $ 5,040    $ 2,881    $ 1,587    $ 572    $ —  
                                  

Minimum purchase commitments include certain components of INTERCEPT blood safety system which the Company purchases from third party manufacturers and provides to Fenwal at no cost. The Company paid $0.9 million, $0.1 million, and $0.1 million under the terms of the minimum purchase commitments during the years ended December, 31, 2007, 2006, and 2005, respectively.

Note 8. Commitments and Contingencies

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The Company leases its office facilities and certain equipment under non-cancelable operating leases with initial terms in excess of one year that require
the Company to pay operating costs, property taxes, insurance and maintenance. These facility leases generally contain renewal options and provisions adjusting the lease payments if those renewal options are exercised. Capital lease obligations
represent the present value of future rental payments under capital lease agreements for information technology hardware.

Future minimum
payments under operating leases are as follows (in thousands):

 





















































Year ending December 31,

   

2008

  $1,475

2009

   1,041

2010

   496

2011

   286

2012 and thereafter

   286
    

Total minimum lease payments

  $3,584
    

Rent expense for office facilities was $1.5 million, $1.2 million and $1.1 million for the years
ended December 31, 2007, 2006, and 2005, respectively.

The Company’s total non-cancelable commitments at December 31, 2007
are as follows (in thousands):

 






















































































































   Total  Less than
1 year
  1-3 years  4-5 years  After 5
years

Minimum purchase requirements

  $1,456  $1,406  $ 50  $—    $—  

Operating leases

   3,584   1,475   1,537   572   —  
                    

Total contractual obligations

  $5,040  $2,881  $1,587  $572  $—  
                    

Minimum purchase commitments include certain components of INTERCEPT blood safety system which the
Company purchases from third party manufacturers and provides to Fenwal at no cost. The Company paid $0.9 million, $0.1 million, and $0.1 million under the terms of the minimum purchase commitments during the years ended December, 31, 2007, 2006,
and 2005, respectively.

This excerpt taken from the CERS 10-K filed Feb 26, 2007.

Note 8. Commitments and Contingencies

The Company leases its office facilities and certain equipment under non-cancelable operating leases with initial terms in excess of one year that require the Company to pay operating costs, property taxes, insurance and maintenance. These facility leases generally contain renewal options and provisions adjusting the lease payments if those renewal options are exercised. Capital lease obligations represent the present value of future rental payments under capital lease agreements for information technology hardware.

Future minimum payments under operating leases are as follows (in thousands):

 

Year ending December 31,

   Operating
Leases

2007

   $ 1,080

2008

     553

2009

     351

2010

     11

2011 and thereafter

     —  
      

Total minimum lease payments

   $ 1,995
      

Rent expense for office facilities was $1.2 million, $1.1 million and $1.2 million for the years ended December 31, 2006, 2005 and 2004, respectively.

 

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Table of Contents

CERUS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2006

 

The Company’s total non-cancelable commitments at December 31, 2006 are as follows (in thousands):

 

     Payments Due by Period, from December 31, 2006
     Total    Less than
1 year
   1-3 years    4-5 years    After 5
years

Minimum purchase requirements

   $ 150    $ 50    $ 100    $ —      $ —  

License fees and sponsored research

     67      67      —        —        —  

Operating leases

     1,995      1,080      904      11      —  
                                  

Total contractual obligations

   $ 2,212    $ 1,197    $ 1,004    $ 11    $ —  
                                  
This excerpt taken from the CERS 10-K filed Feb 27, 2006.

5. Commitments and Contingencies

The Company leases its office facilities and certain equipment under non-cancelable operating leases with initial terms in excess of one year that require the Company to pay operating costs, property taxes, insurance and maintenance. These facility leases generally contain renewal options and provisions adjusting the lease payments. Capital lease obligations represent the present value of future rental payments under capital lease agreements for laboratory and office equipment. The original cost and accumulated amortization on the equipment under capital leases was $0.1 million, $0 and $0.1 million, respectively, for the years ended December 31, 2005, 2004 and 2003, respectively.

Future minimum payments under operating leases are as follows (in thousands):

 

Year ending December 31,

  

Operating

Leases

2006

   $ 1,123

2007

     644

2008

     467

2009

     304

2010

     11
      

Total minimum lease payments

   $ 2,549
      

Rent expense for office facilities was $1.1 million, $1.2 million and $1.3 million for the years ended December 31, 2005, 2004 and 2003, respectively.

On December 8, 2003, a class action complaint was filed in the United States District Court for the Northern District of California against the Company and certain of its present and former directors and officers. On

 

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Table of Contents

CERUS CORPORATION

NOTES TO FINANCIAL STATEMENTS—(Continued)

December 31, 2005

 

December 10, 2003, a second action was filed in the same Court against the same defendants. Both actions were brought on behalf of a purported class of persons who purchased the Company’s publicly traded securities between October 25, 2000, and September 3, 2003. The complaints alleged that the defendants violated the federal securities laws by making certain allegedly false and misleading statements regarding the compound used in the Company’s red blood cell system. As is typical in this type of litigation, several other purported securities class action lawsuits containing substantially similar allegations have since been filed against the defendants. On May 24, 2004, the plaintiffs filed a consolidated complaint. The consolidated complaint abandons the allegations raised in the original complaints. Instead, the plaintiffs claim that the defendants issued false and misleading predictions regarding the initiation and completion of clinical trials, submission of regulatory filings, receipt of regulatory approval and other milestones in the development of the INTERCEPT Blood Systems for platelets, plasma and red blood cells. The consolidated complaint retains the same class period alleged in the original complaints. On June 17, 2004, the plaintiffs filed an amended consolidated complaint substantially similar to the previous consolidated complaint with additional allegations attributed to a confidential witness. On July 20, 2004, the defendants moved to dismiss the amended consolidated complaint. On January 20, 2005, the Court dismissed the complaint with leave to amend within 60 days. The Company believes that this matter will not have a material effect on its results of operations or financial position; however, it cannot predict the outcome of this litigation.

In addition, certain of the Company’s present and former directors and officers have been named as defendants in two virtually identical derivative lawsuits in the Superior Court for the County of Contra Costa, which name the Company as a nominal defendant. The plaintiffs in these actions are certain stockholders who seek to bring derivative claims on behalf of the Company against the defendants. The complaints allege breach of fiduciary duty and related claims. To date, there have been no further substantial developments in this lawsuit. The Company believes that this matter will not have a material effect on its results of operations or financial position; however, it cannot predict the outcome of this litigation.

This excerpt taken from the CERS 10-K filed May 3, 2005.
5. Commitments and Contingencies

The Company leases its office facilities and certain equipment under non-cancelable operating leases with initial terms in excess of one year that require the Company to pay operating costs, property taxes, insurance and maintenance. These facility leases generally contain renewal options and provisions adjusting the lease payments.

Capital lease obligations represent the present value of future rental payments under capital lease agreements for laboratory and office equipment. The original cost and accumulated amortization on the equipment under capital leases was $142,000 and $142,000, respectively, at December 31, 2003. There were no capital lease obligations outstanding as of December 31, 2004.

Future minimum payments under operating leases are as follows:

Year ending December 31,

 

 

 

Operating Leases

 

 

 

(in thousands)

 

2005

 

 

$

1,281

 

 

2006

 

 

666

 

 

2007

 

 

539

 

 

2008

 

 

300

 

 

2009

 

 

150

 

 

Total minimum lease payments

 

 

$

2,936

 

 

 

Rent expense for office facilities was $1,219,000, $1,344,000 and $1,219,000 for the years ended December 31, 2004, 2003 and 2002, respectively.

On December 8, 2003, a class action complaint was filed in the United States District Court for the Northern District of California against the Company and certain of its present and former directors and officers. On December 10, 2003, a second action was filed in the same Court against the same defendants. Both actions were brought on behalf of a purported class of persons who purchased the Company’s publicly traded securities between October 25, 2000, and September 3, 2003. The complaints alleged that the defendants violated the federal securities laws by making certain allegedly false and misleading statements regarding the compound used in the Company’s red blood cell system. As is typical in this type of litigation, several other purported securities class action lawsuits containing substantially similar allegations have since been filed against the defendants. On May 24, 2004, the plaintiffs filed a consolidated complaint. The consolidated complaint abandons the allegations raised in the original complaints. Instead, the plaintiffs claim that the defendants issued false and misleading predictions regarding the initiation and completion of clinical trials, submission of regulatory filings, receipt of regulatory approval and other milestones in the development of the INTERCEPT Blood Systems for platelets, plasma and red blood cells. The consolidated complaint retains the same class period alleged in the original complaints. On June 17, 2004, the plaintiffs filed an amended consolidated complaint substantially similar to the previous consolidated complaint with additional allegations attributed to a

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confidential witness. On July 20, 2004, the defendants moved to dismiss the amended consolidated complaint. On January 20, 2005, the Court dismissed the complaint with leave to amend within 60 days. The Company believes that this matter will not have a material effect on its results of operations or financial position; however, it cannot predict the outcome of this litigation.

In addition, certain of the Company’s present and former directors and officers have been named as defendants in two virtually identical derivative lawsuits in the Superior Court for the County of Contra Costa, which name the Company as a nominal defendant. The plaintiffs in these actions are certain stockholders who seek to bring derivative claims on behalf of the Company against the defendants. The complaints allege breach of fiduciary duty and related claims. To date, there have been no further substantial developments in this lawsuit. The Company believes that this matter will not have a material effect on its results of operations or financial position; however, it cannot predict the outcome of this litigation.

5. Commitments and Contingencies

The Company leases its office facilities and certain equipment under non-cancelable operating leases with initial terms in excess of one year that require the Company to pay operating costs, property taxes, insurance and maintenance. These facility leases generally contain renewal options and provisions adjusting the lease payments.

Capital lease obligations represent the present value of future rental payments under capital lease agreements for laboratory and office equipment. The original cost and accumulated amortization on the equipment under capital leases was $142,000 and $142,000, respectively, at December 31, 2003. There were no capital lease obligations outstanding as of December 31, 2004.

Future minimum payments under operating leases are as follows:

Year ending December 31,

 

 

 

Operating Leases

 

 

 

(in thousands)

 

2005

 

 

$

1,281

 

 

2006

 

 

666

 

 

2007

 

 

539

 

 

2008

 

 

300

 

 

2009

 

 

150

 

 

Total minimum lease payments

 

 

$

2,936

 

 

 

59




Rent expense for office facilities was $1,219,000, $1,344,000 and $1,219,000 for the years ended December 31, 2004, 2003 and 2002, respectively.

On December 8, 2003, a class action complaint was filed in the United States District Court for the Northern District of California against the Company and certain of its present and former directors and officers. On December 10, 2003, a second action was filed in the same Court against the same defendants. Both actions were brought on behalf of a purported class of persons who purchased the Company’s publicly traded securities between October 25, 2000, and September 3, 2003. The complaints alleged that the defendants violated the federal securities laws by making certain allegedly false and misleading statements regarding the compound used in the Company’s red blood cell system. As is typical in this type of litigation, several other purported securities class action lawsuits containing substantially similar allegations have since been filed against the defendants. On May 24, 2004, the plaintiffs filed a consolidated complaint. The consolidated complaint abandons the allegations raised in the original complaints. Instead, the plaintiffs claim that the defendants issued false and misleading predictions regarding the initiation and completion of clinical trials, submission of regulatory filings, receipt of regulatory approval and other milestones in the development of the INTERCEPT Blood Systems for platelets, plasma and red blood cells. The consolidated complaint retains the same class period alleged in the original complaints. On June 17, 2004, the plaintiffs filed an amended consolidated complaint substantially similar to the previous consolidated complaint with additional allegations attributed to a confidential witness. On July 20, 2004, the defendants moved to dismiss the amended consolidated complaint. On January 20, 2005, the Court dismissed the complaint with leave to amend within 60 days. The Company believes that this matter will not have a material effect on its results of operations or financial position; however, it cannot predict the outcome of this litigation.

In addition, certain of the Company’s present and former directors and officers have been named as defendants in two virtually identical derivative lawsuits in the Superior Court for the County of Contra Costa, which name the Company as a nominal defendant. The plaintiffs in these actions are certain stockholders who seek to bring derivative claims on behalf of the Company against the defendants. The complaints allege breach of fiduciary duty and related claims. To date, there have been no further substantial developments in this lawsuit. The Company believes that this matter will not have a material effect on its results of operations or financial position; however, it cannot predict the outcome of this litigation.

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