Quarterly report pursuant to Section 13 or 15(d)

Operating Lease

v3.19.1
Operating Lease
3 Months Ended
Mar. 31, 2019
Leases [Abstract]  
Operating Lease

6. Operating Lease

In August 2017, the Company entered into a lease agreement to lease 24,357 square feet of combination laboratory and office space in South San Francisco, California. This lease expires in February 2025.

The contractually specified minimum rent and annual rent increases for the operating lease are included in the measurement of the ROU asset and related lease liabilities. Under the lease arrangement, we may be required to pay directly, or reimburse the lessor for real estate taxes, insurance, utilities, maintenance and other operating costs. Such amounts are generally variable and therefore not included in the measurement of the ROU asset and related lease liability but are instead recognized as variable lease expense in our Condensed Consolidated Statements of Operations when they are incurred. The option to extend the lease was not recognized as part of the Company’s lease liability and ROU asset.

Because the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. The Company recorded lease liabilities and ROU asset for its office lease based on the present value of lease payments over the expected lease term.

Information related to the Company’s ROU asset and related lease liabilities were as follows (in thousands):

 

 

For three months ended March 31, 2019

 

Cash paid for operating lease liabilities

$

181

 

Remaining lease term

5.92 years

 

Discount rate

 

10

%

 

 

 

 

Maturities of lease liabilities as of March 31, 2019 were as follows:

 

 

 

2019

$

1,095

 

2020

 

1,497

 

2021

 

1,542

 

2022

 

1,588

 

2023

 

1,635

 

2024

 

1,684

 

Thereafter

 

282

 

Total undiscounted lease payments

 

9,323

 

Less: imputed interest

 

(2,366

)

Total lease liabilities

$

6,957

 

 

 

 

 

Operating lease liabilities, current

 

804

 

Operating lease liabilities, noncurrent

 

6,153

 

Total operating lease liabilities

$

6,957

 

Future minimum lease payments are as follows as of December 31, 2018 (in thousands):

 

Year ending December 31:

 

 

 

 

2019

 

$

1,453

 

2020

 

 

1,497

 

2021

 

 

1,542

 

2022

 

 

1,588

 

2023

 

 

1,635

 

Thereafter

 

 

1,966

 

Total future minimum lease payments

 

$

9,681