Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Operating Lease and Rights of Use

The Company’s operating lease obligation consists of leased office, laboratory, and manufacturing space under a non-cancellable operating lease that expires in October 2024. The lease agreement includes a renewal provision allowing the Company to extend this lease for an additional period of five years. Operating lease costs were $870,000 for the year ended December 31, 2019. Cash paid for amounts included in the measurement of operating lease liabilities was $721,000 for the year ended December 31, 2019. As of December 31, 2019, the weighted average discount rate was approximately 6.50% and the weighted average remaining lease term was 4.83 years. Balance sheet information as of December 31, 2019 consists of the following (in thousands):


Operating Lease:	December 31, 2019
Operating lease right-of-use asset in other non-current assets	$	3,400
Operating lease liability in accrued liabilities	$	769
Operating lease liability in other liabilities	3,700
Total operating lease liabilities	$	4,469

The following table summarizes the Company's operating lease maturities as of December 31, 2019 (in thousands):


Year Ending December 31:	Amount
2020	$	1,037
2021	1,066
2022	1,096
2023	1,127
2024	904
Total lease payments	5,230
Less: imputed interest	(761)
Present value of lease liabilities	$	4,469

The aggregate future minimum lease payments under ASC 840 as of December 31, 2018 were as follows (in thousands):


Year Ending December 31:	Total Minimum Lease Payments
2019	$	1,002
2020	1,002
2021	1,031
2022	1,044
2023 and thereafter	1,920
	$	5,999

Purchase Obligations

Purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. As of December 31, 2019, the Company had non-cancellable purchase obligations to suppliers of $7,097,000.

Indemnification

In the normal course of business, the Company enters into contracts and agreements with suppliers and other parties that contain a variety of representations and warranties and may provide for indemnification of the counterparty. The Company’s exposure under these agreements is unknown because it involves claims that may be made against it in the future but have not yet been made. To date, the Company has not been subject to any claims or been required to defend any action related to its indemnification obligations.

The Company indemnifies each of its directors and officers for certain events or occurrences, subject to certain limits, while the director is or was serving at the Company’s request in such capacity, as permitted under Delaware law and in accordance with its certificate of incorporation and bylaws. The term of the indemnification period lasts as long as a director may be subject to any proceeding arising out of acts or omissions of such director in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company currently holds director liability insurance. The Company believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations as of December 31, 2019.

Contingencies

The Company is not involved in any pending legal proceedings that it believes could have a material adverse effect on its financial condition, results of operations or cash flows. From time to time, the Company may pursue litigation to assert its legal right and such litigation may be costly and divert the efforts and attention of its management and technical personnel which could adversely affect its business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. There were no contingent liabilities requiring accrual at December 31, 2019 and 2018.

Legal Matters

In February 2019, a former employee, through counsel, advised the Company that he had filed a charge of discrimination against the Company with the California Department of Fair Employment & Housing, or

DFEH. The former employee’s complaint alleged sexual harassment and retaliation in violation of the California Department of Fair Employment & Housing Act. The complaint did not allege specific damages. The Company and the former employee participated in mediation on July 30, 2019 and reached a settlement that required the Company to pay an amount that was not material to its financial statements, which amount was fully paid as of December 31, 2019.