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Leases

9 Months Ended

Sep. 30, 2021

Note 10. Leases

The Company applies ASC 842, to recognize assets and liabilities for leases with lease terms of more than 12 months on the balance sheet. The Company has elected to account for each separate lease component and non-lease components as one single component for all lease assets. Leases with terms of 12 months or less are not recorded on the balance sheet, and the related lease expenses are recognized on a straight-line basis over the lease term.

The Company has one operating lease agreement entered into in March 2017 for approximately 42,900 square feet of laboratory and office space located in Newark, California. The Company provided the landlord with a $450,000 letter of credit collateralized by restricted cash as security deposit for the lease, which expires in May 2024. The security deposit for the lease was later reduced to $225,000 in March 2021. Under the terms of the lease, the Company is responsible for certain taxes, insurance and maintenance expenses.

On July 2, 2021, the Company entered into an amendment (the “Second Amendment”) to its facility lease agreement dated as of March 2017, as amended, to lease approximately 15,000 square feet of additional office space in Newark, California. The Company commenced operations in the additional space in September 2021. Under the Second Amendment, the Company will pay additional base rent of approximately $1.5 million over the lease term, which expires in May 2024. As a result of this amendment, the Company recorded an additional right-of-use asset and the related liability of $1.4 million as of September 30, 2021. The Company will be responsible for its proportional share of operating expenses and tax obligations. No additional security deposit was required pursuant to the Second Amendment.

The following table provides balance sheet information related to operating leases is as follows (in thousands):


	September 30,		December 31,
Operating Leases:	2021		2020
Operating lease right-of-use asset	$	5,371	$	4,950

Operating lease liability - current	$	2,027	$	1,459
Operating lease liability - noncurrent		4,238		4,500
Total operating lease liabilities	$	6,265	$	5,959

Weighted-average remaining lease term (years)		2.7		3.4
Weighted-average discount rate		9.6%		11.0%

Other information related to the Company’s operating leases is as follows (in thousands):


	Nine Months Ended September 30,
	2021		2020
Operating lease cost	$	1,378	$	1,331
Less: sublease income		(68)		(22)
Total lease expense	$	1,310	$	1,309

Supplemental cash flow information is as follows (in thousands):


	Nine Months Ended September 30,
	2021		2020

Operating cash flow used by operating leases	$	1,493	$	1,450
New operating lease asset obtained in exchange for operating lease liability	$	1,373	$	-

Future lease payments required under lease obligations as of September 30, 2021 are as follows (in thousands):


Year Ending December 31:	Amount
Remainder of 2021	$	556
2022		2,660
2023		2,744
2024		1,160
2025		—
Thereafter		—
Total future minimum lease payments		7,120
Less: imputed interest		(855)
Present value of lease liabilities	$	6,265