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Commitments and Contingencies
 6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Operating Lease Obligations
The Company currently leases office spaces and laboratory spaces located in Greater Los Angeles, California, Dallas, Texas, and the United Kingdom. The Company’s leased facilities have original lease terms ranging from 2 to 5 years that predominately require the Company to provide a security deposit, while certain leases provide the right for the Company to renew the lease upon the expiration of the initial lease term, and various leases have scheduled rent increases on an annual basis. The exercise of lease renewal options for the Company’s existing leases is at the Company’s sole discretion, and not included in the measurement of right of use asset or lease liability as they are not reasonably certain to be exercised. Certain leases have leasehold improvements and are being amortized over the shorter of the estimated useful life of the improvements or the remaining life of the lease. Such improvements incurred by the Company will revert to the landlord at the expiration of the lease and will be removed from Company’s condensed consolidated balance sheets.
The Company’s lease costs consist of the following (in thousands):
Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
Operating lease cost$537$307$925$1,516
Variable lease cost76401366673
Total lease cost$613$708$1,291$2,189
The following table summarizes cash flow information related to the Company’s lease obligations (in thousands):
Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
Cash paid for operating lease liabilities$734 $441 $1,262 $1,316 
The following table summarizes the Company’s lease assets and liabilities (in thousands):
June 30, 2024
December 31, 2023
Operating lease right-of-use assets$1,707 $2,387 
Current operating lease liabilities$1,669 $1,750 
Non-current operating lease liabilities$2,020 $2,877 
The following table summarizes other supplemental information related to the Company’s lease obligations:
June 30, 2024
December 31, 2023
Weighted-average remaining lease term (in years)2.182.60
Weighted-average discount rate6.75 %6.75 %
Future minimum lease payments under operating lease liabilities were (in thousands):
June 30, 2024
2024 (remaining six months)$923 
20251,818 
20261,219 
Total future lease payments3,960 
Less: imputed interest271 
Total lease liability balance3,689 
Less: current portion of operating lease liabilities 1,669 
Total operating lease liabilities, non-current$2,020 
During the six months ended June 30, 2024 and 2023, the Company evaluated its remaining right-of-use assets for impairment, as the Plan (as defined below in Note 10) has resulted in a cessation of use for several locations. The Company determined these assets were impaired, and has recognized an impairment loss of nil and termination gain of $0.2 million for the three months ended June 30, 2024 and 2023, respectively, and $0.2 million and $7.1 million for the six months ended June 30, 2024 and 2023 respectively, which are recorded in the line item "restructuring and impairment charges" in the condensed consolidated statements of operations and comprehensive loss.

Legal Proceedings
From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. The Company does not expect that the resolution of these matters will have a material adverse effect on its financial position, results of operations or cash flows.
Debt
In June 2022, the Company’s wholly owned subsidiary, Complex Therapeutics Mezzanine LLC, and the Company’s wholly owned indirect subsidiary, Complex Therapeutics LLC, entered into a mortgage construction loan and mezzanine construction loan (together, the “Loan”) secured by its Tarzana, California land and building (the “Property”). The initial principal amount of the Loan was $52.1 million, with additional future principal of up to $32.9 million to fund ongoing Property construction costs. Construction has been completed and on July 10, 2024,
Complex Therapeutics LLC leased the Property to AstraZeneca Pharmaceuticals LP, as further described in Note 11. The Loan principal is payable in July 2025, with the option to extend until July 2027. As of June 30, 2024, the outstanding principal amount under the Loan was $82.8 million and unamortized debt issuance costs were $0.9 million. During the year ended December 31, 2023, $0.6 million in additional principal was paid in accordance with the Loan. The Loan is guaranteed by the Company and secured by the Property, and bears interest at the one-month Secured Overnight Financing Rate, plus 5.25% per annum. The Company discontinued capitalizing interest in June 2023 as the building was substantially complete at such time. The Loan contains customary negative and affirmative covenants that include limitations on the ability of the Company to enter into significant contracts and incur additional debt. The Company is also required to maintain consolidated net worth and liquid assets of at least $85.0 million as of June 30, 2024 and December 31, 2023 as defined in the loan agreement. As of June 30, 2024, the Company was in compliance with the covenants of the Loan. The Company is also required to maintain certain insurance coverage on the Property. In connection with the Loan, the Company entered into an interest rate swap to effectively limit its maximum interest rate, as discussed in Note 4.
The net carrying amount of the liability component of the Loan was as follows (in thousands):
 
June 30, 2024
December 31, 2023
Principal amount$82,837 $82,837 
Unamortized debt issuance cost(911)(1,410)
Net carrying amount$81,926 $81,427 
The following table sets forth the interest expense recognized related to the Loan (in thousands):
Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
Contractual interest expense$1,750 $341 $3,482 $728 
Amortization of debt issuance cost249 249 498 498 
Total interest expense related to the Loan$1,999 $590 $3,980 $1,226 
Other Commitments
In the normal course of business, the Company enters into contracts and various purchase agreements commitments with third-party vendors for clinical research services, products and other services from third parties for operating purposes. These agreements generally provide for termination or cancellation, other than for costs already incurred. As of June 30, 2024 and December 31, 2023, the Company had no outstanding liabilities, respectively, in commitments for employee benefits as part of the Plan. As of June 30, 2024 and December 31, 2023, the Company had $3.2 million and $3.1 million, respectively, in commitments for contract terminations as part of the Plan (see Note 10).
The Company has entered into an agreement with a third-party collaborator to develop the CoStAR-TIL Collaboration Product with the aim of enrolling patients in IITs in China. Milestone payments of $2.6 million were made during the six months ended June 30, 2024 and were recorded within research and development expense in the condensed consolidated statements of operations and comprehensive loss, and upon successful completion of future milestones, the Company may be required to pay up to $3.4 million for clinical development.
Commitments and Contingencies Commitments and Contingencies
Operating Lease Obligations
The Company currently leases office spaces and laboratory spaces located in Greater Los Angeles, California, Dallas, Texas, and the United Kingdom. The Company’s leased facilities have original lease terms ranging from 2 to 5 years that predominately require the Company to provide a security deposit, while certain leases provide the right for the Company to renew the lease upon the expiration of the initial lease term, and various leases have scheduled rent increases on an annual basis. The exercise of lease renewal options for the Company’s existing leases is at the Company’s sole discretion, and not included in the measurement of right of use asset or lease liability as they are not reasonably certain to be exercised. Certain leases have leasehold improvements and are being amortized over the shorter of the estimated useful life of the improvements or the remaining life of the lease. Such improvements incurred by the Company will revert to the landlord at the expiration of the lease and will be removed from Company’s condensed consolidated balance sheets.
The Company’s lease costs consist of the following (in thousands):
Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
Operating lease cost$537$307$925$1,516
Variable lease cost76401366673
Total lease cost$613$708$1,291$2,189
The following table summarizes cash flow information related to the Company’s lease obligations (in thousands):
Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
Cash paid for operating lease liabilities$734 $441 $1,262 $1,316 
The following table summarizes the Company’s lease assets and liabilities (in thousands):
June 30, 2024
December 31, 2023
Operating lease right-of-use assets$1,707 $2,387 
Current operating lease liabilities$1,669 $1,750 
Non-current operating lease liabilities$2,020 $2,877 
The following table summarizes other supplemental information related to the Company’s lease obligations:
June 30, 2024
December 31, 2023
Weighted-average remaining lease term (in years)2.182.60
Weighted-average discount rate6.75 %6.75 %
Future minimum lease payments under operating lease liabilities were (in thousands):
June 30, 2024
2024 (remaining six months)$923 
20251,818 
20261,219 
Total future lease payments3,960 
Less: imputed interest271 
Total lease liability balance3,689 
Less: current portion of operating lease liabilities 1,669 
Total operating lease liabilities, non-current$2,020 
During the six months ended June 30, 2024 and 2023, the Company evaluated its remaining right-of-use assets for impairment, as the Plan (as defined below in Note 10) has resulted in a cessation of use for several locations. The Company determined these assets were impaired, and has recognized an impairment loss of nil and termination gain of $0.2 million for the three months ended June 30, 2024 and 2023, respectively, and $0.2 million and $7.1 million for the six months ended June 30, 2024 and 2023 respectively, which are recorded in the line item "restructuring and impairment charges" in the condensed consolidated statements of operations and comprehensive loss.

Legal Proceedings
From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. The Company does not expect that the resolution of these matters will have a material adverse effect on its financial position, results of operations or cash flows.
Debt
In June 2022, the Company’s wholly owned subsidiary, Complex Therapeutics Mezzanine LLC, and the Company’s wholly owned indirect subsidiary, Complex Therapeutics LLC, entered into a mortgage construction loan and mezzanine construction loan (together, the “Loan”) secured by its Tarzana, California land and building (the “Property”). The initial principal amount of the Loan was $52.1 million, with additional future principal of up to $32.9 million to fund ongoing Property construction costs. Construction has been completed and on July 10, 2024,
Complex Therapeutics LLC leased the Property to AstraZeneca Pharmaceuticals LP, as further described in Note 11. The Loan principal is payable in July 2025, with the option to extend until July 2027. As of June 30, 2024, the outstanding principal amount under the Loan was $82.8 million and unamortized debt issuance costs were $0.9 million. During the year ended December 31, 2023, $0.6 million in additional principal was paid in accordance with the Loan. The Loan is guaranteed by the Company and secured by the Property, and bears interest at the one-month Secured Overnight Financing Rate, plus 5.25% per annum. The Company discontinued capitalizing interest in June 2023 as the building was substantially complete at such time. The Loan contains customary negative and affirmative covenants that include limitations on the ability of the Company to enter into significant contracts and incur additional debt. The Company is also required to maintain consolidated net worth and liquid assets of at least $85.0 million as of June 30, 2024 and December 31, 2023 as defined in the loan agreement. As of June 30, 2024, the Company was in compliance with the covenants of the Loan. The Company is also required to maintain certain insurance coverage on the Property. In connection with the Loan, the Company entered into an interest rate swap to effectively limit its maximum interest rate, as discussed in Note 4.
The net carrying amount of the liability component of the Loan was as follows (in thousands):
 
June 30, 2024
December 31, 2023
Principal amount$82,837 $82,837 
Unamortized debt issuance cost(911)(1,410)
Net carrying amount$81,926 $81,427 
The following table sets forth the interest expense recognized related to the Loan (in thousands):
Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
Contractual interest expense$1,750 $341 $3,482 $728 
Amortization of debt issuance cost249 249 498 498 
Total interest expense related to the Loan$1,999 $590 $3,980 $1,226 
Other Commitments
In the normal course of business, the Company enters into contracts and various purchase agreements commitments with third-party vendors for clinical research services, products and other services from third parties for operating purposes. These agreements generally provide for termination or cancellation, other than for costs already incurred. As of June 30, 2024 and December 31, 2023, the Company had no outstanding liabilities, respectively, in commitments for employee benefits as part of the Plan. As of June 30, 2024 and December 31, 2023, the Company had $3.2 million and $3.1 million, respectively, in commitments for contract terminations as part of the Plan (see Note 10).
The Company has entered into an agreement with a third-party collaborator to develop the CoStAR-TIL Collaboration Product with the aim of enrolling patients in IITs in China. Milestone payments of $2.6 million were made during the six months ended June 30, 2024 and were recorded within research and development expense in the condensed consolidated statements of operations and comprehensive loss, and upon successful completion of future milestones, the Company may be required to pay up to $3.4 million for clinical development.