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Leases
9 Months Ended
Sep. 30, 2023
Leases [Abstract]  
Leases Leases
The Company enters into lease arrangements for its facilities as well as certain equipment, classified either as operating or finance leases.
The Company has an operating lease agreement, as amended by the execution of two subsequent amendments, for approximately 33,300 square feet of office space in Seattle, Washington for the Company’s principal executive offices, a laboratory for research and development, and related uses. The lease commenced on January 15, 2020 and expires on February 1, 2029, with the option to extend the lease for two five-year terms.  The lease provides for a tenant improvement allowance of up to $9.5 million, which has been fully utilized.
The Company has an operating lease agreement for approximately 6,272 square feet of office space in Seattle, Washington, for additional office and laboratory space for research and development and related uses (the "Eastlake Lease"). In March 2021, the Company executed an amendment to this lease pursuant to which the contractual lease term was extended through September 30, 2026 with the option to extend the lease for an additional 28-month term. In December 2022, the Company entered into an agreement to sublease this office and laboratory space in Seattle, Washington to an unrelated third party. Pursuant to the terms of the sublease, the Company is entitled to receive up to $0.5 million in base lease payments. The term of the sublease was through August 31, 2023, with an option by the sublessee to extend such term through November 30, 2023. As of September 30, 2023 the sublessee has extended the term through October 31, 2023.
In September 2023, the Company initiated a term sheet for a new sublease for the Eastlake Lease expected to begin in November 2023. As a result, the Company considered the sublease terms to be an indicator of impairment and tested the recoverability of this office and laboratory space using entity-specific undiscounted cash flows. Based on these undiscounted cash flows, the Company concluded the undiscounted future cash flows expected to result from the sublease of its operating lease right-of-use asset was less than the carrying value. Therefore, the Company measured the long-lived asset impairment as the amount by which the carrying value of the asset group exceeds its fair value and recorded an impairment charge of $0.1 million which is included in general and administrative expenses in the condensed statement of operations and comprehensive income (loss).
In October 2023, the Company entered into an agreement to sublease the Eastlake Lease to an unrelated third party. Pursuant to the terms of the sublease, the Company is entitled to receive approximately $1.6 million in lease payments. The term of the sublease will be from November 1, 2023 through September 30, 2026.
As of September 30, 2023, and December 31, 2022, the Company’s operating lease right-of-use assets were $8.7 million and $9.7 million, respectively. As of September 30, 2023, the Company’s finance lease right-of-use assets, included within property and equipment on the condensed balance sheets, were immaterial. As of December 31, 2022, the Company’s finance lease right-of-use assets were $0.5 million.
Leases Leases
The Company enters into lease arrangements for its facilities as well as certain equipment, classified either as operating or finance leases.
The Company has an operating lease agreement, as amended by the execution of two subsequent amendments, for approximately 33,300 square feet of office space in Seattle, Washington for the Company’s principal executive offices, a laboratory for research and development, and related uses. The lease commenced on January 15, 2020 and expires on February 1, 2029, with the option to extend the lease for two five-year terms.  The lease provides for a tenant improvement allowance of up to $9.5 million, which has been fully utilized.
The Company has an operating lease agreement for approximately 6,272 square feet of office space in Seattle, Washington, for additional office and laboratory space for research and development and related uses (the "Eastlake Lease"). In March 2021, the Company executed an amendment to this lease pursuant to which the contractual lease term was extended through September 30, 2026 with the option to extend the lease for an additional 28-month term. In December 2022, the Company entered into an agreement to sublease this office and laboratory space in Seattle, Washington to an unrelated third party. Pursuant to the terms of the sublease, the Company is entitled to receive up to $0.5 million in base lease payments. The term of the sublease was through August 31, 2023, with an option by the sublessee to extend such term through November 30, 2023. As of September 30, 2023 the sublessee has extended the term through October 31, 2023.
In September 2023, the Company initiated a term sheet for a new sublease for the Eastlake Lease expected to begin in November 2023. As a result, the Company considered the sublease terms to be an indicator of impairment and tested the recoverability of this office and laboratory space using entity-specific undiscounted cash flows. Based on these undiscounted cash flows, the Company concluded the undiscounted future cash flows expected to result from the sublease of its operating lease right-of-use asset was less than the carrying value. Therefore, the Company measured the long-lived asset impairment as the amount by which the carrying value of the asset group exceeds its fair value and recorded an impairment charge of $0.1 million which is included in general and administrative expenses in the condensed statement of operations and comprehensive income (loss).
In October 2023, the Company entered into an agreement to sublease the Eastlake Lease to an unrelated third party. Pursuant to the terms of the sublease, the Company is entitled to receive approximately $1.6 million in lease payments. The term of the sublease will be from November 1, 2023 through September 30, 2026.
As of September 30, 2023, and December 31, 2022, the Company’s operating lease right-of-use assets were $8.7 million and $9.7 million, respectively. As of September 30, 2023, the Company’s finance lease right-of-use assets, included within property and equipment on the condensed balance sheets, were immaterial. As of December 31, 2022, the Company’s finance lease right-of-use assets were $0.5 million.