UroGen Pharma Ltd. Leases Disclosure
NOTE 11 – Leases
Operating Leases
The Company had the following office and laboratory facility leases during the period covered by this report:
| • | In April 2016, UPL signed an addendum to its November 2014 lease agreement for the Company’s offices located in Israel, in order to increase the office space rented and to extend the rent period for an additional three years until August 2022. In July 2022, the Company signed a lease extension agreement for the Company’s offices located in Israel, extending the term of the lease through September 2025. The Company's remaining contractual obligation under this lease is approximately $0.2 million as of December 31, 2024. |
| • | In April 2018, UPI entered into a new lease agreement for an office in Los Angeles, California. The lease commencement date was July 10, 2018 and terminated in March 2024. The landlord provided a tenant allowance for leasehold improvements of $0.2 million that was accounted for as a lease incentive. In November 2019, UPI entered into a sublease for this office space, with a lease commencement date of January 1, 2020, which continued until the end of the lease term in March 2024. The subtenants exercised their early access clause and moved into the premises at the end of November 2019. The Company accounted for the sublease as an operating lease in accordance with ASC 842. |
| • | In November 2019, UPI entered into a new lease agreement for an office in Princeton, New Jersey, which the Company now uses as its headquarters. The lease commencement date was November 29, 2019 with an original lease term of 38 months, expiring January 31, 2023. In June 2022, the Company signed a lease extension for the Princeton office, extending the term of the lease through January 31, 2026. The Company’s remaining contractual obligation under this lease is approximately $0.6 million as of December 31, 2024. |
Finance Leases
| • | In July 2024, UPI entered into a new master lease agreement for vehicles, primarily for use by employees in sales, field services, and roles that require regular travel. Under the terms of the master lease agreement, the Company will lease various vehicles from time to time with an initial lease term of 48 months commencing on the delivery date of the vehicle with an option to continue month-to-month for an unlimited period of time. Lease payments are fixed, with payments due monthly in advance, and include charges for depreciation, maintenance, and other related services. At the end of each lease term, the Company is required to make a terminal rental adjustment based on the difference between the vehicle’s contractual book value and its estimated wholesale value, which may result in additional payments or refunds. The Company may also be required to pay additional rent if the vehicle exceeds certain mileage limits or shows abnormal wear and tear during the lease term. The Company’s remaining contractual obligation under this lease is approximately $3.0 million as of December 31, 2024. |
In addition, the Company has other operating office equipment and vehicle leases. The Company’s operating leases may require minimum rent payments, contingent rent payments adjusted periodically for inflation, or rent payments equal to the greater of a minimum rent or contingent rent. The Company’s leases do not contain any residual value guarantees or material restrictive covenants. The Company’s active leases expire at various dates from 2025 through 2028, with varying renewal and termination options.
The components of lease cost for the year ended December 31, 2024 and 2023 were as follows (in thousands):
| Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||
| Finance lease cost: | ||||||||
| Amortization of right-of-use assets | $ | 36 | $ | — | ||||
| Interest on lease liabilities | 20 | — | ||||||
| Operating lease cost | 900 | 934 | ||||||
| Sublease income | (42 | ) | (224 | ) | ||||
| Variable lease cost | 70 | 73 | ||||||
| $ | 984 | $ | 783 | |||||
The amounts recognized as of December 31, 2024 and 2023 were as follows (in thousands):
| Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||
| Finance lease right-of-use | $ | 2,285 | $ | 1,671 | ||||
| Operating lease right-of-use | 849 | — | ||||||
| Finance long-term lease | 1,595 | 844 | ||||||
| Operating long-term lease | 58 | — | ||||||
| Other current related to finance leases | 745 | — | ||||||
| Other current related to operating leases | 785 | 819 | ||||||
As of December 31, 2024, no impairment losses have been recognized.
Supplemental information related to leases for the periods reported is as follows (in thousands, except for lease terms and discount rate amounts):
| Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows from operating leases | $ | 933 | $ | 1,169 | ||||
| Right-of-use assets obtained in exchange for new finance lease liabilities | $ | 2,321 | $ | — | ||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | — | $ | 122 | ||||
| Weighted-average remaining lease term of finance leases (in years) | 3.94 | — | ||||||
| Weighted-average remaining lease term of operating leases (in years) | 1.02 | 1.92 | ||||||
| Weighted-average discount rate of finance leases | 13.82 | % | — | |||||
| Weighted-average discount rate of operating leases | 10.24 | % | 10.21 | % | ||||
As of December 31, 2024, maturities of lease liabilities were as follows (in thousands):
| Finance Leases | ||||
| Years ending December 31, | ||||
| 2025 | $ | 998 | ||
| 2026 | 657 | |||
| 2027 | 657 | |||
| 2028 | 642 | |||
| Total future minimum lease payments | $ | 2,954 | ||
| Less: Interest | (614 | ) | ||
| Present value of lease liabilities | $ | 2,340 | ||
| Operating Leases | ||||
| Years ending December 31, | ||||
| 2025 | $ | 824 | ||
| 2026 | 58 | |||
| Total future minimum lease payments | $ | 882 | ||
| Less: Interest | (39 | ) | ||
| Present value of lease liabilities | $ | 843 | ||
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.