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Leases
9 Months Ended
Sep. 30, 2021
Leases [Abstract]  
Leases

Note 9. Leases

 

Lessee

The Company is party as a lessee to various non-cancelable operating leases with varying terms through March 2028 primarily for laboratory and office space and equipment. The Company has options to renew some of these leases after their expirations. On a lease-by-lease basis, the Company considers such options, which may be elected at the Company’s sole discretion, in determining the lease term. The Company also has a finance lease acquired in the acquisition of CSI for lab equipment through July 2024, and the Company retains CSI’s classification of its leases. The Company does not have any leases with variable lease payments. The Company’s operating lease agreements do not contain any residual value guarantees, material restrictive covenants, bargain purchase options or asset retirement obligations.

The Company’s headquarters are located in Temple City, California, which is comprised of various corporate offices and a laboratory certified under the Clinical Laboratory Improvement Amendments of 1988, or CLIA, accredited by the College of American Pathologists, or CAP, and licensed by the State of California Department of Public Health. Other CLIA-certified laboratories are located in Houston, Texas and Alpharetta, Georgia. Additional offices are located in Atlanta, Georgia and are used for certain report generation functions.

In February 2021, the Company extended the lease for its headquarters located in Temple City, California, to January 31, 2023. In March 2021, the Company entered into a new lease for its 12,000 square foot CLIA-certified laboratory in Houston, Texas, and the lease will expire in November 2023.

The operating and finance lease right-of-use asset, short-term lease liabilities, and long-term lease liabilities as of September 30, 2021 and December 31, 2020 were as follows:

 

September 30,

 

 

December 31,

 

 

2021

 

 

2020

 

 

(in thousands)

 

Operating lease ROU asset, net

$

7,502

 

 

$

828

 

Operating lease liabilities, short term

$

1,830

 

 

$

267

 

Operating lease liabilities, long term

$

5,713

 

 

$

568

 

Finance lease ROU asset, net

$

47

 

 

$

 

Finance lease liabilities, short term

$

16

 

 

$

 

Finance lease liabilities, long term

$

31

 

 

$

 

The following was operating and finance lease expense:

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

(in thousands)

 

Operating lease cost

$

429

 

 

$

167

 

 

$

730

 

 

$

468

 

Finance lease cost:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of ROU assets

 

3

 

 

 

 

 

 

3

 

 

 

 

Interest on lease liabilities

 

 

 

 

 

 

 

 

 

 

 

Short-term lease cost

 

53

 

 

 

56

 

 

 

245

 

 

 

59

 

Total lease cost

$

485

 

 

$

223

 

 

$

978

 

 

$

527

 

 

 

Supplemental information related to operating leases and finance lease was the following:

 

 

September 30, 2021

 

Weighted average remaining lease term - operating leases

5.13 years

 

Weighted average discount rate - operating leases

 

3.15

%

Weighted average remaining lease term -finance lease

2.83 years

 

Weighted average discount rate - finance lease

 

3.12

%

 

The following is a maturity analysis of operating and finance lease liabilities using undiscounted cash flows on an annual basis with renewal periods included:

 

 

Operating Leases

 

 

Finance Lease

 

 

(in thousands)

 

Year Ending December 31,

 

 

 

 

 

 

 

2021 (remaining 3 months)

$

523

 

 

$

5

 

2022

 

2,001

 

 

 

17

 

2023

 

1,541

 

 

 

17

 

2024

 

1,120

 

 

 

10

 

2025

 

1,044

 

 

 

 

2026

 

883

 

 

 

 

Thereafter

 

1,080

 

 

 

 

Total lease payments

 

8,192

 

 

 

49

 

Less imputed interest

 

(649

)

 

 

(2

)

Total

$

7,543

 

 

$

47

 

 

 

Lessor

The Company leases out space in buildings it owns to third-party tenants under noncancelable operating leases and has leased out such space since the Company purchased such buildings in October 2020. The Company also subleases out some space in a lease acquired as part of the acquisition of CSI. As of September 30, 2021, the remaining lease terms left range from 14 months to 47 months including renewal options and may include rent escalation clauses. Lease income primarily represents fixed lease payments from tenants recognized on a straight-line basis over the application lease term. Variable lease income represents tenant payments for real estate taxes, insurance and maintenance.

The lease income was $79,000 and $321,000 for the three and nine months ended September 30, 2021, respectively, which was included in interest and other income, net, in the accompanying Condensed Consolidated Statements of Operations. Total lease income was as follows:

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

(in thousands)

 

Lease income

$

78

 

 

$

 

 

$

315

 

 

$

 

Variable lease income

 

1

 

 

 

 

 

 

6

 

 

 

 

Total lease income

$

79

 

 

$

 

 

$

321

 

 

$

 

 

 

Future fixed lease payments from tenants for all noncancelable operating leases as of September 30, 2021 are as follows:

 

 

Lease Payments

 

 

from Tenants

 

 

(in thousands)

 

Year Ending December 31,

 

 

 

2021 (remaining 3 months)

$

87

 

2022

 

356

 

2023

 

266

 

2024

 

238

 

2025

 

120

 

Total

$

1,067