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Leases
12 Months Ended
Dec. 31, 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 two finance leases for lab equipment through December 2026, one of which was acquired in the acquisition of CSI. The Company retained 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, which 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 December 31, 2021, and 2020 were as follows:

 

December 31,

 

 

2021

 

 

2020

 

 

(in thousands)

 

Operating lease ROU asset, net

$

7,141

 

 

$

828

 

Operating lease liabilities, short term

$

1,842

 

 

$

267

 

Operating lease liabilities, long term

$

5,344

 

 

$

568

 

Finance lease ROU asset, net

$

1,735

 

 

$

 

Finance lease liabilities, short term

$

332

 

 

$

 

Finance lease liabilities, long term

$

1,398

 

 

$

 

 

The following was operating and finance lease expense:

 

 

Year Ended December 31,

 

 

2021

 

 

2020

 

 

2019

 

 

(in thousands)

 

Operating lease cost

$

1,262

 

 

$

566

 

 

$

587

 

Finance lease cost:

 

 

 

 

 

 

 

 

 

 

 

Amortization of ROU assets

 

7

 

 

 

 

 

 

 

Interest on lease liabilities

 

1

 

 

 

 

 

 

 

Short-term lease cost

 

296

 

 

 

142

 

 

 

 

Total lease cost

$

1,566

 

 

$

708

 

 

$

587

 

 

 

 

Supplemental information related to leases was the following:

 

 

December 31, 2021

 

Weighted average remaining lease term - operating leases

4.96 years

 

Weighted average discount rate - operating leases

 

3.15

%

Weighted average remaining lease term -finance lease

4.94 years

 

Weighted average discount rate - finance lease

 

3.21

%

 

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

 

 

Financing Leases

 

 

(in thousands)

 

Year Ending December 31,

 

 

 

 

 

 

 

2022

$

2,037

 

 

$

383

 

2023

 

1,579

 

 

 

383

 

2024

 

1,154

 

 

 

376

 

2025

 

1,048

 

 

 

366

 

2026

 

884

 

 

 

366

 

Thereafter

 

1,080

 

 

 

 

Total lease payments

 

7,782

 

 

 

1,874

 

Less imputed interest

 

(596

)

 

 

(144

)

Total

$

7,186

 

 

$

1,730

 

 

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 December 31, 2021, the remaining lease terms left range from 11 months to 44 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 included in interest and other income, net, in the accompanying Consolidated Statements of Operations. Total lease income was as follows:

 

 

Year Ended December 31,

 

 

2021

 

 

2020

 

 

2019

 

 

(in thousands)

 

Lease income

$

413

 

 

$

144

 

 

$

 

Variable lease income

 

7

 

 

 

1

 

 

 

 

Total lease income

$

420

 

 

$

145

 

 

$

 

 

Future fixed lease payments from tenants for all noncancelable operating leases as of December 31, 2021 are as follows:

 

 

Lease Payments

 

 

from Tenants

 

 

(in thousands)

 

Year Ending December 31,

 

 

 

2022

$

355

 

2023

 

264

 

2024

 

180

 

2025

 

120

 

Total

$

919