Oric Pharmaceuticals, Inc. Commitments Disclosure
11. Commitments and Contingencies
Operating Leases
The Company has operating leases for office and lab space in South San Francisco, California and office space in San Diego, California. In August 2021, the Company entered into a lease amendment for the South San Francisco facility that extended the lease term until May 2028. The lease amendment includes the option to extend the lease for one additional year. In October 2021, the Company entered into a lease amendment for the current San Diego facility that extended the lease expiration from December 2021 to February 2022. Additionally, in September 2021, the Company entered into a lease agreement for a new San Diego facility with a term of 36 months that is expected to commence in the second quarter of 2022.
The right-of-use assets were $11.8 million as of December 31, 2021 and are recorded on the balance sheet in other assets. Lease liabilities are recorded in accrued liabilities and other long-term liabilities on the balance sheet and as of December 31, 2021, were $1.9 million and $10.5 million, respectively.
Operating lease costs for the year ended December 31, 2021, were $1.8 million. Cash paid for operating leases for the year ended December 31, 2021, was $1.9 million. The weighted average discount rate used was 8.2% and the weighted-average remaining lease term for all operating leases was 6.4 years.
Future lease payments of operating lease liabilities as of December 31, 2021, were as follows (in thousands):
Year ending December 31, |
|
Operating Leases |
|
|
2022 |
|
$ |
2,001 |
|
2023 |
|
|
2,415 |
|
2024 |
|
|
2,499 |
|
2025 |
|
|
2,587 |
|
2026 |
|
|
2,677 |
|
Thereafter |
|
|
3,820 |
|
Total minimum lease payments |
|
|
15,999 |
|
Less: interest |
|
|
3,558 |
|
Present value of lease liabilities |
|
$ |
12,441 |
|
Under ASC 840, future minimum lease payments for non-cancelable operating leases as of December 31, 2020, were as follows (in thousands):
Year ending December 31, |
|
Operating Leases |
|
|
2021 |
|
$ |
1,942 |
|
2022 |
|
|
686 |
|
Total minimum lease payments |
|
$ |
2,628 |
|
Rent expense was $1.4 million and $1.3 million for the years ended December 31, 2020 and 2019, respectively.
Litigation
From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. The Company believes there is no threatened litigation or litigation pending that could have, individually or in the aggregate, a material adverse effect on the Company’s financial position, results of operations or cash flows.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2021 | Mar 21, 2022 | Showing above |
| 2020 | Mar 23, 2021 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.