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Leases | 12 Months Ended
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Dec. 31, 2021
Leases [Abstract] |
Leases | Note 11. Leases Operating leases The Company has facility leases for office space under non-cancellable and cancelable operating leases with various expiration dates through 2032 and equipment under a non-cancellable operating lease with a term expiring in 2026. Operating lease cost was approximately $2.8 million and $1.3 million, including variable lease costs of $429,000 and $355,000, and short-term lease costs of $119,000 and $96,000 during the years ended December 31, 2021 and 2020, respectively. The Company paid $1.1 million and $989,000 in cash for operating leases that were included in the operating activities section of the consolidated statements of cash flows for the years ended December 31, 2021 and 2020, respectively. The weighted-average remaining lease term and the weighted-average discount rate of the Company’s operating leases was 9.86 years and 6.9% at December 31, 2021, respectively. The weighted-average remaining lease term and the weighted-average discount rate of the Company’s operating leases was 3.16 years and 7.8% at December 31, 2020, respectively. The weighted-average remaining lease term does not include any renewal options at the election of the Company. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Facility leases In 2018, the Company entered into a lease agreement for approximately 11,000 square feet of office space in San Diego, California which was subsequently amended resulting in a total of 16,153 square feet of office space leased (the 2018 Lease). The amended space is accounted for as a separate lease. The 2018 Lease was again modified in November 2021 to amend the termination date from May 2024 to April 2022. The Company remeasured the associated lease liability using the incremental borrowing rate at the date of the amendment selected on the basis of the remaining lease term and remaining lease payments and adjusted the operating lease asset accordingly, resulting in a $539,000 gain on remeasurement, which was recorded as other income (expense), net in the consolidated statements of operations and comprehensive loss. The 2018 Lease includes an option to holdover the lease month-to-month following the termination date and the Company plans to exercise this holdover option until it moves into its new corporate headquarters, which is anticipated to occur in the second quarter of 2022. The Company’s lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms. The Company is responsible for operating expenses over base operating expenses as defined in the original lease agreement. In September 2020, the Company entered into a lease agreement for 59,407 square feet of laboratory and office space in San Diego, California (the 2020 Lease), which represented a portion of a new facility that was under construction. The construction and design of the asset was the primary responsibility of the lessor. The Company is involved in certain aspects of construction and design for certain interior features and leasehold improvements that will be beneficial to the Company to better suit its business needs and intended purpose of the space. The lease is accounted for as an operating lease and commenced in August 2021. The lease has an initial term of 10.5 years and includes aggregate monthly payments to the lessor of approximately $39.5 million beginning in January 2023 with a rent escalation clause, and a tenant improvement allowance of approximately $13.4 million. The lease is cancellable at the Company’s request after the 84th month with 12 months written notice and a lump-sum cancellation payment of $1.9 million. As discussed in Note 2, the Company provided a letter of credit to the lessor for $312,000, which expires October 31, 2031. In March 2021, the Company entered into the first amendment to the 2020 Lease to expand the rented premises by 18,421 square feet for additional consideration of $96,000 per month starting in January 2023 with a rent escalation clause and to receive an additional $3.4 million tenant improvement allowance. The payment associated with the option to cancel the lease after the 84th month was increased to $2.5 million, and the letter of credit provided to the lessor was increased to $408,000. In December 2021, the Company entered into a lease agreement for 29,542 square feet of office and laboratory space in South San Francisco, California (the 2021 Lease). The lease will be accounted for as an operating lease with the associated operating lease assets and liabilities recorded upon commencement which is expected to be in July 2022. The lease has an initial term of 124 months with an option to extend the term by 5 years and includes aggregate monthly payments to the lessor of approximately $34.4 million beginning in November 2022 with a rent escalation clause, and a tenant improvement allowance of approximately $8.2 million. The Company paid a security deposit of $874,000 in December 2021 which was recorded as other assets in the consolidated balance sheets. Future minimum lease payments under the operating leases with initial lease terms in excess of one year (excluding the 2021 Lease) as of December 31, 2021 are as follows (in thousands):
Year ending December 31, |  |
2022 |  | 287 |
2023 |  | 5,026 |
2024 |  | 5,177 |
2025 |  | 5,333 |
2026 |  | 5,493 |
Thereafter |  | 30,568 |
Total lease payments | $ | 51,884 |
Less: Amount representing interest |  | (16,319 | )
Less: Tenant improvement allowance receivable |  | (16,774 | )
Operating lease liabilities | $ | 18,791 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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