Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Facility Lease Agreement

The Company leases office and laboratory space in Redwood City, California with a lease term that is set to end on September 30, 2032. The Company has an option to renew for an additional five-year term at then-current market rates, which is not reasonably certain of being exercised. The lease of additional office and laboratory space pursuant to an amendment entered into in June 2020 commenced in February 2022 and the Company recorded a right-of-use asset of $8.8 million and lease liability of $6.9 million as of the commencement of the lease. This lease liability is based on the present value of lease payments over the lease term, which was estimated using an incremental borrowing rate of 7.4% based on information available at the commencement date. In connection with the leased space, the Company maintains a letter of credit issued to the lessor in the amount of $0.5 million as of June 30, 2022 and December 31, 2021, respectively, which is secured by restricted cash that is classified as noncurrent at each date based on the term of the underlying lease.

During the period from June 2020 through May 2021, the Company was provided with temporary space. The Company was not required to pay additional rent for the temporary space, but was required to pay property taxes, insurance and normal maintenance costs with respect to the temporary space.

As of June 30, 2022, the remaining weighted-average lease term was 10.3 years and the weighted-average incremental borrowing rate used to determine the operating lease liabilities was 6.2%.

The components of lease costs related to the Company’s operating leases were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating lease costs	$	958	$	506	$	1,771	$	691
Variable lease costs	84		193		278		326
Short-term lease costs	69		7		138		10
Total lease costs	$	1,111	$	706	$	2,187	$	1,027

Variable lease costs are primarily comprised of common area maintenance and include costs associated with the temporary space.

As of June 30, 2022, future minimum commitments under the Company’s non-cancelable facility operating lease are as follows:


Years ending December 31,	(in thousands)
2022 (remaining six months)	$	1,338
2023	3,633
2024	3,738
2025	3,846
2026	3,957
Thereafter	25,137
Total undiscounted future minimum lease payments	41,649
Present value adjustment for minimum lease commitments	(11,368)
Tenant improvement receivable	(256)
Total operating lease liabilities	$	30,025

Purchase Commitments and Obligations

The Company has certain purchase commitments related to its inventory management with certain manufacturing suppliers wherein the Company is required to purchase the amounts forecasted in a blanket purchase order within a certain time period. The contractual obligations represent future cash commitments and liabilities under agreements with third parties and exclude orders for goods and services entered into in the normal course of business that are not enforceable or subject to change. These outstanding commitments amounted to $3.2 million and $5.5 million as of June 30, 2022 and December 31, 2021, respectively.

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. The Company has entered into indemnification agreements with certain directors and officers that require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of the status or service as directors or officers. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of June 30, 2022 and December 31, 2021, the Company does not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities.

Contingencies

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company is not currently a party to any material legal proceedings.