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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 | 7. Commitments and Contingencies Leases The Company has operating leases for buildings, equipment and vehicles. Existing leases have remaining terms ranging from less than one year to approximately 6 years. Some leases contain options to extend the lease, usually for up to five years, along with termination options. The Company’s facility lease has an expiration date of April 30, 2030 and contains an option to extend the lease, for up to five years, along with termination options. The Company is utilizing one floor (19 th floor) for its corporate operations with all expense for this floor included within selling, general and administrative expense on the Company’s consolidated statement of operations for the years ended December 31, 2023 and 2022. As part of the Company’s restructuring plan discussed further in Note 14, in August 2022, the Company entered into an agreement to sublease approximately 25% of its corporate headquarters space (18 th floor) in South San Francisco, California for a period of 39 months. As of December 31, 2023, 24 months were remaining on the sublease. The Company expects to recognize $4.8 million of sublease income over the lease term that commenced in October 2022. At December 31, 2023, $2.9 million sublease income is expected to be recognized over the remaining lease term. In addition, on February 28, 2023, the Company signed a second agreement to sublease an additional 25% of its corporate headquarters (21 st floor) for a period of 77 months, which commenced on December 1, 2023. The Company expects to recognize additional sublease income of $9.1 million over the lease term. At December 31, 2023, $9.0 million sublease income is expected to be recognized over the remaining lease term. Rent expense, net of sublease income, is reported within restructuring and related charges for the year ended December 31, 2023, in the consolidated statements of operations. The Company is currently in the process of fully vacating and potentially subleasing an additional floor (20 th floor). Information about the Company's operating leases is as follows:
|  | December 31, 2023 |  |  | December 31, 2022 |
Weighted average remaining lease term (in years) |  | 5.9 years |  |  | 6.8 years |
Weighted average discount rate per annum |  |  | 11.8 | % |  |  | 11.8 | %
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |
Operating lease cost (including variable costs) |  | $ | 11,159 |  |  | $ | 10,917 |
Variable costs (including non-lease components) |  | $ | 3,164 |  |  | $ | 2,930 |
Sublease income |  | $ | 2,679 |  |  | $ | 189 |
Cash paid for amounts included in the measurement of operating lease liabilities |  | $ | 7,931 |  |  | $ | 7,540 |
Future minimum lease payments and sublease income as of December 31, 2023 under commenced non-cancelable operating leases are as follows (in thousands):
Fiscal Year |  | Minimum Lease Payments for Operating Leases |  |  | Sublease Income |  |  | Net Minimum Lease Payments for Operating Leases |
2024 |  | $ | 8,086 |  |  | $ | (2,877 | ) |  | $ | 5,209 |
2025 |  |  | 8,135 |  |  |  | (2,952 | ) |  |  | 5,183 |
2026 |  |  | 7,821 |  |  |  | (1,381 | ) |  |  | 6,440 |
2027 |  |  | 7,395 |  |  |  | (1,430 | ) |  |  | 5,965 |
2028 |  |  | 7,355 |  |  |  | (1,480 | ) |  |  | 5,875 |
Thereafter |  |  | 10,225 |  |  |  | (2,058 | ) |  |  | 8,167 |
Total future minimum payments (receipts) |  |  | 49,017 |  |  | $ | (12,178 | ) |  | $ | 36,839 |
Imputed interest |  |  | (14,320 | ) |  |  |  |  |  |
Total operating lease liabilities |  |  | 34,697 |  |  |  |  |  |  |
Less: current portion of operating lease liabilities |  |  | 4,323 |  |  |  |  |  |  |
Operating lease liabilities, net of current portion |  | $ | 30,374 |  |  |  |  |  |  |
Other Commitments In the normal course of business, the Company enters into various contractual and legally binding purchase commitments. As of December 31, 2023, the Company's open commitments totaled $9.7 million. Capital expenditure commitments as of December 31, 2023 were immaterial. The Company has entered into several license and patent agreements. Under these agreements, the Company pays annual license maintenance fees, non-refundable license issuance fees, and royalties as a percentage of net sales for the sale or sublicense of products using the licensed technology. Future payments related to these license agreements have not been included in the open commitments above, as the period of time over which the future license payments will be required to be made, and the amount of such payments, are indeterminable. The Company does not expect the license payments to be material in any particular year. Indemnification From time to time, the Company has entered into indemnification provisions under certain of its agreements in the ordinary course of business, typically with business partners, customers and suppliers. Pursuant to these agreements, the Company may indemnify, hold harmless and agree to reimburse the indemnified parties on a case-by-case basis for losses suffered or incurred by the indemnified parties in connection with any patent or other intellectual property infringement claim by any third party with respect to the Company’s products. The term of these indemnification provisions is generally perpetual from the time of the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is typically not limited to a specific amount. In addition, the Company has entered into indemnification agreements with its officers, directors and certain other employees. With certain exceptions, these agreements provide for indemnification for related expenses including, among others, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. Litigation On November 28, 2023, a purported stockholder filed a complaint against the Company and the members of the Company’s Board in the United States District Court for the Northern District of California. The complaint has since been voluntarily dismissed. On December 12, 2023 two separate shareholder complaints were filed in the District of Delaware, The complaints asserted claims under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder and Section 20(a) of the Exchange Act for allegedly causing the filing with the SEC on November 14, 2023 of a materially deficient registration statement on Form S-4. Among other remedies, the plaintiffs sought to enjoin a stockholder vote on the proposed Merger. The Company is reviewing the complaints and has not yet formally responded to them. On December 13, 2023, a complaint was filed in the Delaware Court of Chancery against SomaLogic and certain officers and directors alleging Breach of Fiduciary Duty and Aiding and Abetting Breach of Fiduciary Duty. This complaint also sought an injunction postponing the proposed transaction, which was denied by the Court on January 4, 2024. The non-injunctive claims, including breach of fiduciary duty, are still being litigated. Litigation is inherently uncertain and there can be no assurance regarding the outcome. Whether or not any plaintiffs’ claim is successful, this type of litigation may result in significant costs and divert management’s attention and resources, which could adversely affect the operation of the Company. Between October 24, 2023 and January 3, 2024, SomaLogic received 16 letters from purported shareholders demanding that SomaLogic allow the inspection of its books and records and/or make corrective disclosures to its registration statement. Additional lawsuits against the Company and certain of our officers or directors may be filed in the future. If additional similar complaints are filed, absent new or different allegations that are material, the Company will not necessarily announce such additional filings. In the normal course of business, the Company is from time to time involved in legal proceedings or potential legal proceedings, including matters involving employment, intellectual property, or others. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of any currently pending matters would not have a material adverse effect on our business, operating results, financial condition, or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

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