Annual report pursuant to Section 13 and 15(d)

Commitments and Contingencies

Commitments and Contingencies
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 9 — Commitments and Contingencies


Office Leases


The Company’s corporate office lease is on a month-to-month basis, with a 5% per annum increase in the monthly lease payment effective February 1 of each year, and the lease agreement may be cancelled with three months written notice. Total rent expense incurred under the corporate office space lease arrangement was $142,991 and $125,186 for 2019 and 2018, respectively. As of December 31, 2019, the Company’s future minimum lease payments for the corporate office lease on a month-to-month basis are estimated to be approximately $138,000 for the period January 1, 2020 to December 31, 2020. Additionally, the Company entered into two separate short-term lease arrangements for office space, including a lease agreement for the period October 16, 2019 to September 30, 2020 and a lease agreement for the period November 1, 2019 to April 30, 2020, with such lease agreement subsequently renewed for a six-month period of May 1, 2020 to October 31, 2020. The minimum lease payments under both lease agreements is an aggregate of approximately $51,000 for the period January 1, 2020 to October 31, 2020.


EsoGuard Clinical Trials - Agreement with Clinical Research Organization


In September 2019, the Company, through its majority-owned subsidiary Lucid Diagnostics Inc., entered into an agreement with a clinical research organization (“CRO”) in connection with EsoGuard clinical trials, referred to as the EsoGuard CRO Agreement. The CRO will assist the Company with conducting two concurrent clinical trials referred to as the “EsoGuard screening study” and the “EsoGuard case control study”. The term of the EsoGuard CRO Agreement is from the September 2019 effective date to the conclusion of the respective clinical trials, but not to exceed 60 months from the effective date of the EsoGuard™ CRO Agreement. The CRO agreement may be cancelled with sixty days written notice, without an early termination fee. Under the CRO agreement, the Company paid to the CRO a refundable on-account deposit of $643,000, with such deposit classified as a non-current asset in the line item captioned Deposit and other assets on the accompanying consolidated balance sheet as of December 31, 2019. The Company has recognized as research and development expense approximately $700,000 during the year ended December 31, 2019 with respect to the EsoGuard CRO Agreement.


Legal Proceedings


In the ordinary course of our business, particularly as we begin commercialization of our products, the Company may be subject to certain other legal actions and claims, including product liability, consumer, commercial, tax and governmental matters, which may arise from time to time. Except as otherwise noted herein, the Company does not believe it is currently a party to any other pending legal proceedings. Notwithstanding, legal proceedings are subject-to inherent uncertainties, and an unfavorable outcome could include monetary damages, and excessive verdicts can result from litigation, and as such, could result in a material adverse impact on the Company’s business, financial position, results of operations, and /or cash flows. Additionally, although the Company has specific insurance for certain potential risks, the Company may in the future incur judgments or enter into settlements of claims which may have a material adverse impact on the Company’s business, financial position, results of operations, and /or cash flows.


The Company executed a “Settlement Agreement & Mutual Releases”, dated December 12, 2018, resulting in the Company making a settlement payment of $136,606, inclusive of plaintiff’s legal fees of $11,006, to a former financial advisor to the Company.