Leases

12 Months Ended

Dec. 31, 2021

On June 19, 2019, we entered into a lease agreement (the “Prior Lease”) with ARE SD Region No.44 LLC ("Landlord") for the lease of approximately 8,727 square feet of rentable area of the building located at 10628 Science Center Drive, Suite 225, San Diego, California 92121 (the “Prior Premises”). The commencement date of the Prior Lease was July 1, 2019 (the “Prior Commencement Date”). We used the Prior Premises as our principal executive offices and as a laboratory for research and development and other related uses. The term of the Prior Lease (the “Prior Initial Term”) was two years, six months, ending December 31, 2021. The base rent payments due for the Prior Premises were $0.4 million in 2020 and $0.4 million in 2021, net of certain rent abatement terms. We were also responsible for the payment of additional rent to cover our share of the annual operating expenses of the building, the annual tax expenses of the building and the annual utilities cost of the building.

On July 1, 2019, we recorded a $0.8 million lease liability for the Prior Lease, which was calculated as the present value of future lease payments to be made under the Prior Lease. A $0.6 million ROU asset was also recorded on July 1, 2019, which represents the difference between the lease liability and the remaining $0.2 million deferred credit for the reduction of the lease liability under the operating lease agreement with Landlord dated February 25, 2019.

On February 11, 2021, we entered into a lease agreement (the "Campus Point Lease") with ARE-SD Region No. 61, LLC (as successor in interest to ARE-SD Region No. 58, LLC) ("Campus Point Landlord"), for the lease of approximately 13,438 square feet of rentable area located at 4224 Campus Point Court, Suite 210, San Diego, California, 92121 (the "Campus Point Premises"). The commencement date of the Campus Point Lease was April 15, 2021. However, for accounting purposes the lease commencement date was February 11, 2021. We are using the Campus Point Premises as our new principal executive offices and as a laboratory for research and development. The term of the Campus Point Lease (“Campus Point Initial Term”) is 60 months, ending April 30, 2026. The aggregate base rent due over the initial term of the Campus Point Lease is approximately $3.8 million. We are also responsible for the payment of additional amounts to cover our share of the annual operating expenses of the building, the annual tax expenses of the building and the utilities costs for the building.

On February 11, 2021, concurrently with entry into the Campus Point Lease, we entered into an Assignment and Assumption of Lease (the “Assignment Agreement”) with Turning Point Therapeutics, Inc. (“Assignee”) and a Consent to Assignment (the "Consent") with Landlord. Pursuant to the Assignment Agreement, we assigned all rights, title, and interest under the Prior Lease to Assignee and delivered the Prior Premises to Assignee on April 22, 2021. Pursuant to the Assignment Agreement, Assignee paid us $60,000 in non-refundable assignment consideration. Additionally, the Consent stipulates that we were not required to pay a fee pursuant to the Prior Lease in connection with the assignment.

The execution of the Campus Point Lease, Consent, and Assignment Agreement resulted in a modification which was not accounted for as a separate contract. Rather, we accounted for the three contracts with Campus Point Landlord in combination, as they were entered into at the same time and negotiated as a package to achieve the same commercial objective. We accounted for a $0.2 million reduction in the lease liability for the Prior Lease as a deferred credit that is amortized as a reduction to rent expense over the term of the Campus Point Lease. A lease liability of less than $0.1 million and ROU asset of less than $0.1 million remained with respect to the Prior Lease and was fully amortized as of April 30, 2021. On February 11, 2021, we recorded a $3.2 million lease liability for the Campus Point Lease, which was calculated as the present value of future

lease payments to be made under the Campus Point Lease. A $3.0 million ROU asset was also recorded on February 11, 2021, which represents the difference between the lease liability and the $0.2 million deferred credit for the reduction of the lease liability under the Prior Lease.

The table below summarizes our lease liabilities and corresponding ROU assets as of December 31, 2021 and 2020 (in thousands):


	Year Ended December 31,
	2021		2020
Assets
Operating	$	2,564	$	253
Financing	—		288
Total ROU assets	$	2,564	$	541

Liabilities
Current:
Operating	$	589	$	417
Financing	—		56
Long-term:
Operating	2,417		—
Financing	—		—
Total lease liabilities	$	3,006	$	473

The table below summarizes our lease costs from our statement of operations and cash payments from our statement of cash flows during the years ended December 31, 2021 and 2020 (in thousands):


	Year Ended December 31,
	2021		2020
Lease cost:
Operating lease cost	$	746	$	278
Finance lease cost:
Amortization of right-of-use assets	29		178
Interest expense on lease liabilities	1		10
Total finance lease cost	$	30	$	188

Cash payment information:
Operating cash used for operating leases	$	468	$	429
Operating cash used for finance leases	1		10
Financing cash used for finance leases	80		277
Total cash paid for amounts included in the measurement of lease liabilities	$	549	$	716

The table below summarizes other non-cash information under our operating and financing lease obligations as of December 31, 2021 and 2020 (in thousands, except years and rates):


	Year Ended December 31,
	2021			2020
Supplemental non-cash information:
Operating lease liabilities arising from obtaining right-of-use assets	$	3,006		$	—

Weighted-average remaining lease term (years) - operating leases	4.3			1.0
Weighted-average remaining lease term (years) - finance leases	0			0.2
Weighted-average discount rate - operating leases	6.0		%	10.9		%
Weighted-average discount rate - finance leases	—			4.9		%

Our future lease payments under our operating lease at December 31, 2021 are as follows (in thousands):


	Operating Leases


2022	$	754
2023	776
2024	800
2025	824
2026	277
Total operating lease payments	3,431
Less: amount representing interest	(425)
Present value of obligations under operating lease	3,006
Less: current portion	(589)
Long-term operating lease obligations	$	2,417