SOLENO THERAPEUTICS INC Leases Disclosure
Note 7. Leases
Facility Leases
The Company's operating lease for its headquarters facility office space in Redwood City, California began in June 2021 and expired in May 2023. In April 2023, the Company entered into a twenty-four month lease extension commencing on June 1, 2023. The term of the lease extension expires in May 2025.
The Company’s operating lease ROU assets, current operating lease liabilities and long-term operating lease liabilities each appear as a separate line within the Company’s consolidated balance sheet. As of December 31, 2023 and December 31, 2022, the Company’s were equal to $0.3 million and $0.2 million, respectively, and the were equal to $0.1 million as of December 31, 2023. There were no long-term operating lease liabilities as of December 31, 2022.
The Company recorded an increase to its right-of-use asset by $0.6 million and an increase to its lease liability by $0.6 million as a result of the lease extension. The weighted average discount rate related to the Company’s lease liabilities was 8.25% as of December 31, 2023 over a remaining term of 17 months, and 9% as of December 31, 2022 over the remaining term of 5 months. The discount rates were determined based on estimates of the Company's incremental borrowing rate, as the discount rates implicit in the Company’s leases cannot be readily determined.
The components of lease expense were as follows (in thousands):
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Year Ended |
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December 31, |
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December 31, |
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Operating lease cost: |
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Operating lease cost |
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$ |
312 |
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$ |
324 |
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Short-term lease cost |
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44 |
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29 |
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Total operating lease cost |
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$ |
356 |
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$ |
353 |
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Supplemental cash flow information related to leases was as follows (in thousands):
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Year Ended |
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December 31, |
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December 31, |
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Cash paid for amounts included in the measurement of lease liabilities: |
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Operating cash flows from operating leases |
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$ |
341 |
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$ |
354 |
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The following is a schedule by year of future maturities of the Company’s operating lease liabilities as of December 31, 2023 (in thousands):
2024 |
|
|
287 |
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2025 |
|
|
143 |
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Total lease payments |
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|
430 |
|
Less interest |
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(27 |
) |
Total |
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$ |
403 |
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Mar 7, 2024 | Showing above |
| 2022 | Mar 22, 2023 | |
| 2021 | Mar 31, 2022 | |
| 2020 | Mar 3, 2021 | |
| 2019 | Mar 4, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.