Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

On June 24, 2014, the Company entered into a lease agreement for completed office and laboratory space located in San Diego, California. The office space under the lease is the Company's corporate headquarters. The lease commenced in two phases (in July 2014 and March 2015) at a combined total initial monthly rent of $24,100 per month. The leased property is subject to a 3% annual rent increase following availability. In addition to such base monthly rent, the Company is obligated to pay certain customary amounts for its share of operating expenses and facility amenities. The original lease provided for expiration on January 31, 2018. On March 23, 2017, the Company entered into a First Amendment to Lease Agreement to amend the original lease agreement and to extend the term of the original lease for one year through January 31, 2019. On April 5, 2018, the Company entered into a Second Amendment to Lease Agreement to extend the lease term through January 31, 2020. On August 2, 2018, the Company entered into a Third Amendment to Lease Agreement to expand the size of the existing space for an additional base rent of $4,000 per month. On October 30, 2019, the Company entered into a Fourth Amendment to Lease Agreement to extend the lease term to the first half of 2021, and to expand the size of the existing space for no additional base rent. On March 4, 2020, and July 15, 2020 the Company entered into a Fifth Amendment and Sixth Amendment to Lease Agreement, respectively to expand the size of the existing space for no additional base rent. All other terms and covenants from the original lease agreement remain unchanged.

The Company's building lease is considered to be an operating lease. The lease agreement indicates the interest rate applicable to the lease is 12%, therefore the Company used a discount rate of 12% to calculate the value of its lease obligations. The Company recorded $0.1 million and $0.1 million in operating lease cost for the three months ended September 30, 2020 and 2019, respectively. The Company recorded $0.2 million and $0.3 million in operating lease cost for the nine months ended September 30, 2020 and 2019, respectively. The building lease has a remaining lease term of under one year from September 30, 2020. As of September 30, 2020, the condensed consolidated balance sheet includes a $0.6 million operating right-of-use asset within other long-term assets, and a $0.6 million operating lease liability in deferred revenue and other current liabilities, and remaining lease payments on an undiscounted basis are $0.1 million for 2020 and $0.1 million for 2021.

On June 30, 2020, the Company entered into an amended and restated lease agreement (the "Amended and Restated Lease") for office and laboratory space located in San Diego, California, for the Company's future corporate headquarters. The Amended and Restated Lease supersedes in its entirety the original lease agreement for the Company's future corporate headquarters dated as of August 22, 2019. The Amended and Restated Lease will have a lease term of 12 years ("Lease Term"), unless terminated earlier. The Lease Term has an initial abatement period, and the initial base rent payable will be approximately $0.6 million per month following the abatement period, which amount will increase by 3% per year over the Lease Term. The Company has also received incentives from the landlord for tenant improvements. As of September 30, 2020, the Company had not taken control of the space and the Lease Term had not commenced. Accordingly, no right-of-use asset or lease liability related to the lease has been recorded.