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COMMITMENTS AND CONTINGENCIES
 3 Months Ended
Mar. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES
Finance Lease Obligations
The Company entered into a finance lease for lab equipment in November 2023. The finance lease had 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. In March 2025, the Company entered into an assignment and assumption agreement whereby the Company agreed to transfer and assign to a third party all of the Company's present and future rights, interests, duties, obligations and liabilities under the finance lease, resulting in a derecognition of the finance lease right-of-use asset and finance lease liabilities as of March 31, 2025, and the recognition of a $0.2 million loss on disposal in other expense, net in continuing operations during the three months ended March 31, 2025.
Finance lease costs were immaterial for the three months ended March 31, 2025 and 2024.
Operating Lease Obligations
The Company entered into an operating lease for laboratory and office space in San Diego, California 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 increased 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 March 31, 2025, 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 and timing of cash flows arising from the Company’s operating lease as of March 31, 2025 (in thousands):
2025$1,248 
20261,731 
Total undiscounted operating lease payments2,979 
Less: Imputed interest(306)
Present value of operating lease payments$2,673 
The balance sheet classification of the Company’s operating lease is as follows (in thousands):
Balance Sheet Classification:
Operating lease right-of-use asset$2,435 
Current portion of operating lease liability$1,437 
Long-term operating lease liability1,236 
Total operating lease liabilities$2,673 
As of March 31, 2025, the weighted average remaining operating lease term was 1.8 years.
Cash paid for amounts included in the measurement of operating lease liabilities was $0.4 million for each of the three months ended March 31, 2025 and 2024.
Operating lease costs were $0.4 million for each of the three months ended March 31, 2025 and 2024. 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 R&D activities, manufacturing, and professional services. These contracts generally provide for termination either on notice or after a notice period.
Reduction in Force
On September 9, 2024, management of the Company, as authorized by the board of directors of the Company, approved a reduction in the Company’s workforce, or the Reduction, of 20 employees, which represented approximately 30% of the Company’s workforce. The Reduction reflects the Company’s focus on the clinical development of CD388, its influenza product candidate. The Reduction was completed on November 1, 2024.
As a result of the Reduction, the Company incurred charges of $1.2 million for severance payments and employee benefits in 2024. The Company does not expect to incur additional charges related to the Reduction. As of March 31, 2025, all amounts have been paid.
Standby Letter of Credit
On December 11, 2024, the Company established a standby letter of credit with its banking institution, Wells Fargo, for $6.0 million for the benefit of its indirect tax service provider, as it relates to indirect tax compliance services in various tax jurisdictions outside of the U.S. in connection with the rezafungin supply chain activities and commercial sales of REZZAYO. The letter of credit expires on November 30, 2025 and is automatically extended without amendment for an additional one-year period from the current expiration date, unless notified by the Company to terminate prior to 90 days from the expiration date. The cash held as collateral for this standby letter of credit is recorded as restricted cash and is held in an interest-bearing account.