Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Commitments Commitments
Operating Leases
The Company subleases office space in Solana Beach, California that serves as its corporate headquarters and houses certain management and personnel. The sublease term commenced on December 15, 2020, is set to expire on December 31, 2026, and is renewable for an additional five-year period, at the Company’s option, provided that the Company’s landlord has entered into an extension of its prime lease for the office space that encompasses the Company’s office space for at least five years.
The Company also leases space in Carlsbad, California, that houses office space and a manufacturing facility under a lease that commenced on June 1, 2023 and ends on May 31, 2033. The Company has two options to extend the lease term for thirty-six or sixty months, at the fair market rental value. Upon establishment of the new manufacturing facility in Carlsbad, the Company terminated its prior manufacturing facility lease in Irvine, California, effective October 2023. The lease termination did not have a material impact to the consolidated financial statements.
The optional renewal periods for both leases are not considered in the determination of the right-of-use asset or the lease liability as the Company does not consider it reasonably certain that it would exercise either of such options. The lease arrangements contain lease components and non-lease components which are accounted for as a single lease component as the Company has elected the practical expedient to group lease and non-lease components for all leases.
Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used the published U.S. High Yield CCC corporate bond rates at the lease commencement date of the Solana Beach lease and the current estimate of the Company's incremental borrowing rate at the lease commencement date of the Carlsbad lease. As of December 31, 2023, the weighted average remaining lease term of the Company's operating leases was 7.38 years and the weighted average discount rate used to determine the operating lease liability was 11.8%.
The lease cost, included in general and administrative expense, was $0.6 million and $0.5 million for the years ended December 31, 2023 and 2022, respectively.
As of December 31, 2023, future minimum lease payments are as follows:
Years ending December 31, (in thousands)
2024 $ 869 
2025 954 
2026 985 
2027 502 
2028 520 
Thereafter 2,519 
Total minimum payments 6,349 
Less: Discount to present value of lease payments (2,357)
Discounted present value of lease payments $ 3,992 
Purchase Commitments
The Company is a party to various purchase arrangements related to our manufacturing and research and development activities. At December 31, 2023 there was approximately $0.9 million of open purchase orders and contractual obligations in the ordinary course of business, the majority of which are due within one year. Additionally, the Company is also a party to license and collaboration agreements which require minimum purchase commitments for a five-year period starting in 2022. The total remaining minimum purchase commitment related to these agreements is $2.1 million over the next four years.