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COMMITMENTS AND CONTINGENCIES | 12 Months Ended
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Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation From time to time, the Company may be involved in various lawsuits, legal proceedings, or claims that arise in the ordinary course of business. Management believes there are no claims or actions pending against the Company at December 31, 2023 which will have, individually or in the aggregate, a material adverse effect on its business, liquidity, financial position or results of operations. Litigation, however, is subject to inherent uncertainties, and an adverse result in such matters may arise from time to time that may harm the Company’s business. Finance Lease Obligations The Company has a finance lease for lab equipment which was entered into in November 2023. The finance lease has a term of 36 months, monthly lease payments of $25,009, and an option to purchase the lab equipment for $1 at the end of the finance lease term. As of December 31, 2023, the Company was reasonably certain that it would exercise the option to purchase the lab equipment at the end of the finance lease term. The useful life of the lab equipment is estimated to be 10 years. The rate implicit to the finance lease used in measuring the Company’s finance lease liability was 8.0%. The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s finance lease as of December 31, 2023 (in thousands):
2024 | $ | 275 |
2025 | 300 |
2026 | 300 |
2027 | 25 |
Total undiscounted finance lease payments | 900 |
Less: Imputed interest | (107) |
Present value of finance lease payments | $ | 793 |
The balance sheet classification of the Company’s finance lease is as follows (in thousands):
Balance Sheet Classification: |
Finance lease right-of-use asset | $ | 788 |
Accumulated amortization | (6) |
Net finance lease right-of-use asset | $ | 782 |
Current portion of finance lease liability | $ | 218 |
Long-term finance lease liability | 575 |
Total finance lease liabilities | $ | 793 |
As of December 31, 2023, the weighted average remaining finance lease term was 3.1 years. Cash paid for amounts included in the measurement of finance lease liabilities was zero for the year ended December 31, 2023. Finance lease costs were immaterial for the year ended December 31, 2023. Operating Lease Obligations The Company has an operating lease for laboratory and office space in San Diego, California which was entered into in June 2014. Amendments for additional space were entered into in February 2015, March 2015 and August 2015. On April 20, 2023, the Company entered into a seventh amendment to its operating lease with Nancy Ridge Technology Center, L.P. which extended the term of the operating lease by an additional 36 months and increases the base rent to $133,371 per month effective January 1, 2024, subject to 4% increases every January. The operating lease expires on December 31, 2026 with options for two individual two-year extensions, as described in the original lease agreement, which have not been exercised, and remain in effect and available to the Company. As of December 31, 2023, the Company was not reasonably certain that it would exercise the extension options, and therefore did not include these options in the determination of the total operating lease term for accounting purposes. The incremental borrowing rate used in measuring the Company’s operating lease liability was 12.0%. The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating lease as of December 31, 2023 (in thousands):
2024 | $ | 1,600 |
2025 | 1,665 |
2026 | 1,731 |
Total undiscounted operating lease payments | 4,996 |
Less: Imputed interest | (912) |
Present value of operating lease payments | $ | 4,084 |
The balance sheet classification of the Company’s operating lease is as follows (in thousands):
Balance Sheet Classification: |
Operating lease right-of-use asset | $ | 3,788 |
Current portion of operating lease liability | $ | 1,082 |
Long-term operating lease liability | 3,002 |
Total operating lease liabilities | $ | 4,084 |
As of December 31, 2023, the weighted average remaining operating lease term was 3 years. Cash paid for amounts included in the measurement of operating lease liabilities was $1.3 million and $1.2 million for the years ended December 31, 2023 and 2022, respectively. Operating lease costs were $1.6 million and $1.3 million for the years ended December 31, 2023 and 2022, respectively. These costs are primarily related to the Company’s operating lease, but also include immaterial amounts for variable leases and short-term leases with terms greater than 30 days. Contractual Obligations The Company enters into contracts in the normal course of business with vendors for research and development activities, manufacturing, and professional services. These contracts generally provide for termination either on notice or after a notice period.

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