Quarterly report pursuant to Section 13 or 15(d)

Commitments

v3.19.1
Commitments
3 Months Ended
Mar. 31, 2019
Commitments And Contingencies Disclosure [Abstract]  
Commitments

 

9.

Commitments

Leases

The Company determines if an arrangement is a finance lease, operating lease or short-term lease at inception, or as applicable, and accounts for the arrangement under the relevant accounting literature. Currently, the Company is only party to a non-cancelable office space operating lease and short-term lease arrangements. Under the relevant guidance, the Company recognizes operating lease ROU assets and liabilities based on the present value of the future minimum lease payments over the lease term at the commencement date, using the Company’s assumed incremental borrowing rate of 12%, and amortizes the ROU assets and liabilities over the lease term. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company’s short-term leases are not subject to recognition of an ROU asset or liability or straight-line lease expense requirements.

In February 2014, the Company entered into a noncancelable operating lease agreement (the Lease) for certain office space with a lease term from July 2014 through December 2019 and a renewal option for an additional five years. In May 2015, the Company entered into a first amendment to the Lease (the First Lease Amendment) for additional office space starting in September 2015 through September 2020. The First Lease Amendment also extended the term of the Lease to September 2020. The monthly base rent under the Lease and the First Lease Amendment increases approximately 3% annually from approximately $33,000 in 2015 to approximately $39,000 in 2020.

As of March 31, 2019, the Company’s ROU assets and liabilities related to the Lease and the First Lease Amendment are as follows (in thousands):

 

ROU assets (included in other assets)

 

$

514

 

 

 

 

 

 

Current portion of lease liabilities

 

$

398

 

Lease liabilities, less current portion

 

 

229

 

Total lease liabilities

 

$

627

 

 

The following table reconciles the undiscounted cash flows for the periods presented below to the operating lease liabilities recorded in the condensed balance sheet as of March 31, 2019 (in thousands):

 

Remaining in 2019

 

$

329

 

2020

 

 

351

 

Total lease payments

 

 

680

 

Present value adjustment

 

 

(53

)

Total lease liabilities

 

$

627

 

 

For the three months ended March 31, 2019 and 2018, rent expense was as follows (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

Operating lease

 

$

95

 

 

$

95

 

Short-term leases

 

 

17

 

 

 

 

Total

 

$

112

 

 

$

95

 

 

Other Commitments

In July 2010, the Company entered into a stock purchase agreement with Pfizer Inc. (Pfizer), pursuant to which the Company acquired all of the outstanding stock of Idun Pharmaceuticals, Inc., which was subsequently spun off to the Company’s stockholders in January 2013. Under the stock purchase agreement, the Company may be required to make payments to Pfizer totaling $18.0 million upon the achievement of specified regulatory milestones.