Compass Therapeutics, Inc. Commitments Disclosure

12.	Commitments and Contingencies

 

Leases

 

The Company accounts for operating leases on a straight-line basis over the lease term, with recognition of a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments. For leases with a term of 12 months or less, we recognize lease expense on a straight-line basis over the lease term.

The Company has evaluated its leases under ASC 842, Leases, and determined that it has one lease that is classified as an operating lease. The classification of this lease is consistent with the Company’s determination under the previous accounting standard.

 

When available, the Company will use the rate implicit in the lease to discount lease payments to present value; however, the Company’s current lease does not provide an implicit rate. Therefore, the Company used its incremental borrowing rate of 6.25% to discount the lease payments based on the date of the lease commencement.

 

The Company has one operating lease for its corporate office and laboratory facility (“Facility”) that was signed in December 2020. The Company moved into the Facility in January 2021. The Facility lease has an initial term of four years and five months, beginning on January 1, 2021.

 

The terms of the Facility lease were modified effective September 27, 2024 through the execution of a new lease. The modified terms extended the non-cancelable lease term through May 2031. The modified terms also included the right to use an additional 10,724 square feet that commenced in May 2025. The classification and incremental borrowing rate for the lease did not change as a result of this lease modification. Right-of-use assets obtained in exchange for new operating lease liabilities due to the lease modification were $9.9 million for a total right-of-use assets as of December 31, 2025 of $9.1 million. The remaining lease term of the Facility lease is 5.4 years as of December 31, 2025. The Company has $568 thousand of restricted cash associated with an irrevocable letter of credit required by the landlord to enter into this lease.

 

Lease costs related to the Facility were $1.3 million and $1.1 million for the years ending December 31, 2025 and 2024, respectively. Cash paid for this lease was $0.8 million and $1.4 million for the years ended December 31, 2025 and 2024, respectively.

 

The table below presents the undiscounted cash flows for the lease term. The undiscounted cash flows are reconciled to the operating lease liabilities recorded on the consolidated balance sheets:

 

		(000's)
Years ending December 31,
2026		$	1,525
2027			2,204
2028			2,249
2029			2,294
2030			2,356
Thereafter			995
Total minimum lease payments			11,623
Less: amount of lease payments representing interest			(1,794	)
Present value of future minimum lease payments			9,829
Less: operating lease obligations, current portion			(1,000	)
Operating lease obligations, long-term portion		$	8,829

 

Defined Contribution Plan

 

The Company has a 401(k) defined contribution plan (the “401(k) Plan”) for substantially all its employees. Eligible employees may make pre-tax or post-tax (Roth) contributions to the 401(k) Plan up to statutory limits. Since January 1, 2020, the Company has been matching employee contributions to the plan up to 4% of salary. On July 1, 2023, the Company increased the employee matching contribution from 4% to 6%. The Company made matching contributions of $0.4 million and $0.3 million for the years ended December 31, 2025 and 2024, respectively.