Annual report pursuant to Section 13 and 15(d)

Leases

v3.21.1
Leases
12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
Leases
7. Leases
The Company has one operating lease pertaining to 17,698 square feet of corporate office space in Newark, California pursuant to a lease agreement that commenced January 16, 2014 and was amended on April 16, 2018. At December 31, 2020 and December 31, 2019, the Company’s lease portfolio had a weighted average remaining term of 3.1 years, and 4.1 years, respectively, with an option to extend for an additional 5 years. The lease requires monthly lease payments that are subject to annual increases throughout the lease term. The optional period has not been considered in the determination of the
right-of-use
assets or lease liabilities associated with this lease as the Company did not consider it reasonably certain it would exercise the option.
The Company cannot determine the implicit rate in its lease, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency
environment. The Company used an incremental borrowing rate as of the date of adoption for leases that commenced prior to January 1, 2019. The weighted average discount rate for the Company’s lease portfolio at December 31, 2020 and December 31, 2019 was 12.6% and 12.6%, respectively.
For the years ended December 31, 2020 and 2019, the Company incurred $0.5 million and $0.5 million, respectively, of lease costs included in operating expenses in the consolidated statements of operations and comprehensive loss in relation to its operating lease, a portion of which was variable rent expense and not included within the measurement of the Company’s operating ROU assets and lease liabilities. The variable rent expense consists primarily of the Company’s proportionate share of operating expenses, property taxes, and insurance and is classified as lease expense due to the Company’s election to not separate lease and
non-lease
components. Short-term lease costs were not material. At December 31, 2020, and December 31, 20
1
9, the Company’s operating lease
right-of-use
asset totaled $0.3 million and $0.2 million, respectively, and the operating lease liability totaled $1.7 million and $2.1 million, respectively. The short-term portion of the operating lease liability was $0.5 million and is contained within other accrued liabilities on the balance sheet, with the remaining $1.2 million liability reported on the balance sheet as long-term portion of operating lease liability.
As of December 31, 2020, the maturities of the Company’s operating lease liabilities were as follows (in thousands):
 
Year ending December 31,
        
2021
     667  
2022
     686  
2023
     707  
2024
     30  
    
 
 
 
Total undiscounted future minimum lease payments
   $ 2,090  
Less: imputed interest
     346  
    
 
 
 
Total operating lease liability
   $ 1,744  
Less: current portion of operating lease liability
     482  
    
 
 
 
Long-term portion of lease liability
   $ 1,262