Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Guarantees and Indemnifications

In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of September 30, 2021 and December 31, 2020, the Company does not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities.

Facility Lease

In July 2013, the Company entered into a three-year lease agreement for its current facility located in Redwood City, California. In 2018, the Company expanded the lease space and extended the lease agreement through October 2023. The lease agreement provides for an escalation of rent payments each year and the Company records rent expense on a straight-line basis over the term of the lease. Rent is payable monthly. As of September 30, 2021 and December 31, 2020, the remaining future minimum lease payments under this lease is $5.1 million and $6.7 million, respectively.

In connection with the Company’s adoption of ASC Topic 842, Leases, on January 1, 2020, the Company recorded a right-of-use leased asset of $6.0 million and a corresponding lease liability of $7.4 million and derecognized a deferred rent obligation of $1.4 million. The Company used its borrowing rate of 10% as its discount rate and the remaining operating lease term was 3.8 years. The results for the year ended December 31, 2020 subsequent periods are presented under Topic 842.

Rent expense recognized under the lease, including additional rent charges for utilities, parking, maintenance, and real estate taxes, was $0.5 million for each of the three months ended September 30, 2021 and 2020, and $1.5 million for each of the nine months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021 and December 31, 2020, the Company has future commitments of $55.1 million and $56.7 million from debt repayments and office space under a non-cancelable operating lease expiring October 2023, respectively.

Future minimum annual operating lease and debt repayments are as follows (in thousands):

As of September 30, 2021	Minimum Lease Payments		Debt Repayments		Total
2021	$	604	$	—	$	604
2022	2,445		—		2,445
2023	2,092		12,500		14,592
2024	—		37,500		37,500
Total minimum payments	5,141		50,000		55,141
Less: amount representing interest/unamortized debt discount	(559)		(238)		(797)
Present value of future payments	4,582		49,762		54,344
Less: current portion	(2,032)		—		(2,032)
Non-current portion	$	2,550	$	49,762	$	52,312

As of December 31, 2020	Minimum Lease Payments		Debt Repayments		Total
2021	$	2,179	$	—	$	2,179
2022	2,445		6,250		8,695
2023	2,092		25,000		27,092
2024	—		18,750		18,750
Total minimum payments	6,716		50,000		56,716
Less: amount representing interest/unamortized debt discount	(912)		(1,042)		(1,954)
Present value of future payments	5,804		48,958		54,762
Less: current portion	(1,708)		(4,551)		(6,259)
Non-current portion	$	4,096	$	44,407	$	48,503

As of September 30, 2021 and December 31, 2020, the Company’s security deposit is in the form of, and recorded as, restricted cash. In January 2021, in connection with the Company’s amended loan agreement with modified terms, the interest-only period was modified from 24 months beginning October 1, 2021 to 36 months

beginning October 1, 2022, and accordingly, the current portion of the amount due was reclassified to non-current. Upon the completion of the Company raising over $50 million in its IPO in September 2021, interest-only payments were extended an additional 12 months followed by 12 months of amortization of principal and interest.

Commitments and Contingencies

Commitments and Contingencies

Guarantees and Indemnifications

In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of September 30, 2021 and December 31, 2020, the Company does not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities.

Facility Lease

In July 2013, the Company entered into a three-year lease agreement for its current facility located in Redwood City, California. In 2018, the Company expanded the lease space and extended the lease agreement through October 2023. The lease agreement provides for an escalation of rent payments each year and the Company records rent expense on a straight-line basis over the term of the lease. Rent is payable monthly. As of September 30, 2021 and December 31, 2020, the remaining future minimum lease payments under this lease is $5.1 million and $6.7 million, respectively.

In connection with the Company’s adoption of ASC Topic 842, Leases, on January 1, 2020, the Company recorded a right-of-use leased asset of $6.0 million and a corresponding lease liability of $7.4 million and derecognized a deferred rent obligation of $1.4 million. The Company used its borrowing rate of 10% as its discount rate and the remaining operating lease term was 3.8 years. The results for the year ended December 31, 2020 subsequent periods are presented under Topic 842.

Rent expense recognized under the lease, including additional rent charges for utilities, parking, maintenance, and real estate taxes, was $0.5 million for each of the three months ended September 30, 2021 and 2020, and $1.5 million for each of the nine months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021 and December 31, 2020, the Company has future commitments of $55.1 million and $56.7 million from debt repayments and office space under a non-cancelable operating lease expiring October 2023, respectively.

Future minimum annual operating lease and debt repayments are as follows (in thousands):

As of September 30, 2021	Minimum Lease Payments		Debt Repayments		Total
2021	$	604	$	—	$	604
2022	2,445		—		2,445
2023	2,092		12,500		14,592
2024	—		37,500		37,500
Total minimum payments	5,141		50,000		55,141
Less: amount representing interest/unamortized debt discount	(559)		(238)		(797)
Present value of future payments	4,582		49,762		54,344
Less: current portion	(2,032)		—		(2,032)
Non-current portion	$	2,550	$	49,762	$	52,312

As of December 31, 2020	Minimum Lease Payments		Debt Repayments		Total
2021	$	2,179	$	—	$	2,179
2022	2,445		6,250		8,695
2023	2,092		25,000		27,092
2024	—		18,750		18,750
Total minimum payments	6,716		50,000		56,716
Less: amount representing interest/unamortized debt discount	(912)		(1,042)		(1,954)
Present value of future payments	5,804		48,958		54,762
Less: current portion	(1,708)		(4,551)		(6,259)
Non-current portion	$	4,096	$	44,407	$	48,503

As of September 30, 2021 and December 31, 2020, the Company’s security deposit is in the form of, and recorded as, restricted cash. In January 2021, in connection with the Company’s amended loan agreement with modified terms, the interest-only period was modified from 24 months beginning October 1, 2021 to 36 months

beginning October 1, 2022, and accordingly, the current portion of the amount due was reclassified to non-current. Upon the completion of the Company raising over $50 million in its IPO in September 2021, interest-only payments were extended an additional 12 months followed by 12 months of amortization of principal and interest.