Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

11. Commitments and Contingencies

Leases

As of December 31, 2021, the Company has three operating leases for real estate in California and Maryland:

• San Diego, California – corporate headquarters, including corporate, R&D, and manufacturing operations, with a term date of December 2026, jointly leased with a related party (refer to Note 9 – Related Party Transactions, for further information);

• San Diego, California – supplemental office space adjacent to the Company’s corporate headquarters with a term date of December 2026; and

• Frederick, Maryland – mixed laboratory and administrative space with a term date of November 2025.

In October 2021, the Company entered into an operating lease for its new corporate headquarters. The lease commenced on November 1, 2021 and expires on December 31, 2026. At commencement, base rent due under the lease was approximately $11 thousand and increases approximately 3.5% per annum over the lease term. The lease is subject to additional variable charges, including insurance, maintenance costs, taxes and operating expenses. Base rent and additional variable charges are shared between the Company and S Real Estate Holdings LLC, a related party, pursuant to a co-tenant agreement between the parties (refer to Note 9 – Related Party Transactions, for further information). In addition, base rent for months two through five of the lease term were abated by 50%. At lease commencement, the Company recognized a right-of-use asset and lease liabilities of approximately $232 thousand.

In November 2021, the Company entered into an operating lease for supplemental office space adjacent to its new corporate headquarters with the same landlord. The lease commenced on December 1, 2021 and expires on December 31, 2026 and is not subject to the co-tenant agreement with S Real Estate Holdings, LLC. At commencement, base rent due under the supplemental office lease was approximately $4 thousand per month and increases at a fixed amount per annum over the lease term. At lease commencement, the Company recognized a right-of-use asset and lease liabilities of $247 thousand.

The Company’s operating leases for real estate are subject to additional variable charges for common area maintenance and other variable costs, and do not include an option to extend the lease term. As of December 31, 2021, total right-of-use assets and operating lease liabilities were approximately $868 thousand and $1.1 million, respectively. As of December 31, 2021, the Company had no finance leases.

Information related to the Company’s right-of-use assets and related lease liabilities were as follows (in thousands):

	Years Ended
	2021			2020
Operating lease costs	$	456		$	464
Short-term lease costs		1			7
Variable lease costs		225			211
Total lease costs	$	682		$	682
Operating cash used for operating leases		508			509
Right-of-use asset obtained in exchange for operating lease liability		479			421
Weighted-average remaining lease term (years)		4.42			3.90
Weighted-average discount rate		13.48	%		17.05	%

Maturities of lease liabilities as of December 31, 2021 were as follows (in thousands):

Years ending December 31,
2022	$	317
2023		338
2024		349
2025		360
2026		119
Total minimum lease payments		1,483
Less: imputed interest		(354	)
Total future minimum lease payments		1,129
Less: operating lease liabilities, current		(179	)
Operating lease liabilities, net of current portion	$	950

Licensed Patents

The Company has a minimum annual license fee of $75 thousand payable in two installments per year to Astellas Pharma pursuant to the amended UMass IP license agreement. The license agreement with Astellas Pharma may be terminated by the Company at any time with a 30-day notice.