Quarterly report pursuant to Section 13 or 15(d)

Lease

v3.20.1
Lease
3 Months Ended
Mar. 31, 2020
Leases [Abstract]  
Lease

6. 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 operating lease agreement has one option to extend the lease term for a period of five years at the fair market rate at the time of the extension. The option to extend the lease was not recognized as part of the Company’s lease liability and ROU asset as the Company determined the renewal rent costs are uncertain and the option is not reasonably certain to be exercised.

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. As of March 31, 2020, the weighted average remaining lease term was 4.92 years and the weighted average discount rate used to determine the operating lease liability was 10.0%.

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

 

 

Three months ended

March 31, 2020

 

Cash paid for operating lease liabilities

$

211

 

Operating lease costs

 

275

 

Variable lease costs

 

131

 

 

 

 

 

Maturities of lease liabilities as of March 31, 2020 were as follows

   for the years ending December 31:

 

 

 

2020

$

1,128

 

2021

 

1,542

 

2022

 

1,588

 

2023

 

1,635

 

2024

 

1,684

 

Thereafter

 

282

 

Total undiscounted lease payments

 

7,859

 

Less: imputed interest

 

(1,706

)

Total lease liabilities

$

6,153

 

 

 

 

 

Operating lease liabilities, current

 

934

 

Operating lease liabilities, noncurrent

 

5,219

 

Total operating lease liabilities

$

6,153