Commitments and Contingencies

12 Months Ended

Nov. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings

From time to time, the Company may be involved in legal proceedings in the ordinary course of business. 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. Legal fees and other costs associated with such actions are expensed as incurred. As of November 30, 2022, the Company was not a party to any material legal proceedings.

Indemnifications

In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with its partners, suppliers and vendors, among others. Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred in connection with its service, breach of representations or covenants, intellectual property infringement or other claims made against such parties. These provisions may limit the time within which an indemnification claim can be made. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. The Company has not incurred any material costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in these consolidated financial statements as management believes such liability is immaterial.

In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon the Company to provide indemnification under such agreements, and thus, there are no claims that the Company is aware of that could have a material effect on the Company’s consolidated financial statements. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is not specified in the agreements. However, the Company currently has directors’ and officers’ insurance that reduces its exposure and may enable the Company to recover a portion of any future amounts paid.

Operating Leases

The Company leases office and laboratory facilities totaling approximately 57,902 square feet within the same building in San Francisco, California under several lease agreements. The terms of these lease agreements expire on April 30, 2025. The Company has an option to renew these leases for an additional two years, which has not been included in the lease term used to calculate the right-of-use asset and lease liability as it is not reasonably certain that the Company will exercise this option. The Company is required to pay base rent plus the tenant’s proportionate share of operating expenses as defined in the lease agreement.

In July 2021, the Company entered into a lease agreement for the lease of approximately 19,320 square feet of office space in a different building in San Francisco, California. The lease commenced on December 1, 2021 and will expire on June 30, 2024, unless terminated earlier. The Company is required to pay base rent plus the tenant’s proportionate share of operating expenses as defined in the lease agreement.

The leased premises were subject to additional variable lease payments related to landlord-owned improvements which were not estimable at lease inception. The right-of-use assets recognized in exchange for lease obligations for these additional variable lease payments were $1.2 million and $0.3 million for the years ended November 30, 2022 and 2021, respectively.

In March 2022, the Company entered into a lease agreement for the lease of approximately 46,434 square feet of office space in The Woodlands, Texas, for a research and development laboratory and related uses. The Company obtained access to the premise on August 1, 2022 to commence construction of landlord-owned improvements, and the lease is expected to commence in fiscal year 2023 when the underlying assets become available for use and will expire on March 1, 2035, unless terminated earlier. The Company has an option to renew for two additional terms of five years each, and it is not reasonably certain that the Company will exercise this option. The minimum rent payable by the Company under the lease will be approximately $205,000 per month, beginning on March 1, 2023, which amount will increase by 3% per year over the term of the lease; provided that, for the period between March 1, 2023 and February 29, 2024, the minimum rent payable by the Company under the lease will be approximately $154,000 per month. The Company will also be responsible for the payment of the tenant’s proportionate share of operating expenses as defined in the lease agreement.

Operating lease expenses, excluding additional rent charges for utilities, maintenance and real estate taxes, were $5.9 million and $3.8 million for the years ended November 30, 2022 and 2021, respectively. Short-term lease expense was not material for all periods presented. As of November 30, 2022, the weighted average remaining lease term was 2.2 years and the weighted average discount rate was 2.98%.

Other information related to leases were as follows (in thousands):


	Year Ended November 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Cash flows from operating leases	$	6,578	$	4,026
Supplemental disclosures of non-cash investing and financing activities:
Right-of-use assets recognized in exchange for lease obligations	$	5,068	$	2,371

The undiscounted future non-cancellable lease payments under the Company’s lease agreement as of November 30, 2022 were as follows (in thousands):


Year ending November 30,	Operating Leases
2023	$	6,980
2024	7,422
2025	4,330
2026	2,670
2027	2,750
2028 to 2035	22,556
Total undiscounted lease payments	46,708
Less: imputed interest	(430)
Less: undiscounted lease payments related to the lease in The Woodlands, Texas	(34,314)
Total operating lease liabilities	$	11,964
Operating lease liabilities, current	$	5,530
Operating lease liabilities, net of current portion	6,434
Total operating lease liabilities	$	11,964