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OPERATING LEASES
9 Months Ended
Sep. 30, 2020
Leases [Abstract]  
OPERATING LEASES

5. OPERATING LEASES

Menlo Park Office Space Lease

We had an operating lease for office space at 149 Commonwealth Drive, Menlo Park, California, or the Menlo Park Lease, that commenced in February 2018 and terminated on May 29, 2020. No amounts remain outstanding under the Menlo Park Lease since June 30, 2020.

New Jersey Office Space Lease

In April 2019, we entered into an operating lease agreement for office space located at 3 Sylvan Way, Parsippany, New Jersey, or the New Jersey Lease. The initial term of the New Jersey Lease is 11 years with an option to extend for an additional five years and a one-time option to terminate the New Jersey Lease without cause as of the 103rd month anniversary of the commencement date of the lease. The New Jersey Lease commenced on October 1, 2019, upon our control of the office space on that date. As of the lease commencement date, the right-of-use asset and corresponding operating lease liability was approximately $2,356,000, which represented the present value of remaining lease payments over the initial lease term of 11 years, net of a seven-month rent abatement period and, using an incremental borrowing rate of 8%. Under the New Jersey Lease, we are also obligated to pay certain variable expenses separately from the base rent, including electricity and common area maintenance. Such costs are considered non-lease components and have been excluded from the calculation of the right-of-use asset and corresponding operating lease liability and are being expensed in the period they are incurred.

Foster City Office Space Lease

In October 2019, we entered into an operating lease agreement for office space located at 919 East Hillsdale Boulevard, Foster City, California, or the Foster City Lease. The purpose of the Foster City Lease is to replace our office space at 149 Commonwealth Drive, Menlo Park, California (see above). The initial term of the Foster City Lease is 87 months with an option to extend for an additional five years.

The Foster City Lease commenced on March 10, 2020, upon the substantial completion of all tenant improvements. As of the lease commencement date, the right-of-use asset and corresponding operating lease liability was approximately $3,426,000, which represented the present value of remaining lease payments using an incremental borrowing rate of 7% over the initial lease term of 87 months, net of a three-month rent abatement period. Under the Foster City Lease, we are also obligated to pay certain variable expenses separately from the base rent, including taxes and common area maintenance. Such costs are considered non-lease components and have been excluded from the calculation of the right-of-use asset and corresponding operating lease liability and are being expensed in the period they are incurred.

The future non-cancellable lease payments under the New Jersey Lease and the Foster City Lease as of September 30, 2020 were as follows (in thousands):

 

Remainder of 2020

 

$

224

 

2021

 

 

913

 

2022

 

 

937

 

2023

 

 

962

 

2024

 

 

987

 

Thereafter

 

 

3,821

 

Total lease payments

 

 

7,844

 

Less: imputed interest

 

 

(2,050

)

Total

 

$

5,794