Leases |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases |
Note 5. Leases As described in “Note 2 Summary of Significant Accounting Policies,” the Company adopted Topic 842 as of January 1, 2019. Prior period amounts have not been adjusted and continue to be reported in accordance with historic accounting under Topic 840. Real Estate Operating Lease In June 2018, the Company entered into a three-year lease agreement with no renewal options with a related party, one of the investors in the Series B redeemable convertible preferred stock. The lease began on July 16, 2018 and provides 3,185 square feet of office and laboratory space in South San Francisco, California. The Company issued 114,437 shares of its Series B redeemable convertible preferred stock with a fair value of $1.1 million in exchange for the leased facility. No other payments are due under the lease. 100% of the issued shares were initially subject to a repurchase option. Each month beginning on the one-month anniversary of the commencement date of the lease, 1/36th of the total shares are released from the repurchase option until all shares are released over the lease period of 3 years. The scheduled release of shares will cease immediately on the occurrence of a termination event. In the event of a termination of the lease for any reason other than (i) a material, uncured default of the tenant or (ii) the voluntary or involuntary liquidation, dissolution or winding up of the tenant, the Company has an irrevocable exclusive option for a period of three months from the termination to repurchase any unvested shares. In the event of (i) or (ii) above or an acquisition or initial public offering of the tenant, any unvested shares will fully and immediately vest, and any repurchase option will lapse in respect to any unvested shares. The Company recognizes lease expense on a straight-line basis over the term of its operating lease. The common area maintenance and other operating costs are included in the base rent. As of March 31, 2019, 89,006 unvested shares were subject to the repurchase option representing $856,000 of future rent expense to be recognized over the remaining term of 28 months on a straight-line basis over the respective lease period. As described in “Note 10 Subsequent Events”, the Company has completed its IPO on May 13, 2019. As there will be no unvested shares upon the initial public offering, the operating lease liability balance will be fully extinguished. Maturities of the lease liabilities as of March 31, 2019 are presented in the following table (in thousands):
The Company determined its operating lease liabilities for operating lease using a discount rate of 4.00% based on the rate that the Company would have to pay to borrow on a collateralized basis for a similar lease an amount equal to the lease payments in a similar economic environment. Lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. As of March 31, 2019, the weighted-average remaining lease term was 2.40 years. Rent expense for the operating lease for the three months ended March 31, 2019 was $92,000. |