VivoSim Labs, INC. Leases Disclosure
Note 8. Leases
After the initial adoption of ASC Topic 842, on an on-going basis, the Company evaluates all contracts upon inception and determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of identified asset in exchange for consideration over a period of time. If a lease is identified, the Company will apply the guidance from ASC Topic 842 to properly account for the lease.
Operating Leases
On November 23, 2020, the Company entered into a lease agreement, pursuant to which the Company permanently leased approximately 8,051 square feet of office space (the “Permanent Lease”) in San Diego once certain tenant improvements were completed by the landlord and the premises were ready for occupancy. Additionally, on November 17, 2021, the Permanent Lease was amended to add an additional 2,892 square feet of office space in the same building. The Permanent Lease commenced on December 17, 2021 and is intended to serve as the Company’s permanent premises for approximately sixty-two months. Monthly rental payments are approximately $40,800 with 3% annual escalators.
The Company determined that the Permanent Lease is considered an operating lease under ASC Topic 842, and therefore upon the lease commencement date of December 17, 2021, recognized lease liabilities and corresponding right-of-use assets of $2.3 million. The Company records operating lease expense on a straight-line basis over the life of the lease (referred to as “operating lease expense”). Variable lease expenses associated with the Company’s leases, such as payments for additional monthly fees to cover the Company’s share of certain facility expenses (common area maintenance) are expensed as incurred.
The table below summarizes the Company’s lease liabilities and corresponding right-of-use assets as of March 31, 2025 (in thousands):
|
|
March 31, 2025 |
|
|
ASSETS |
|
|
|
|
Operating lease right-of-use assets |
|
$ |
867 |
|
Total lease right-of-use assets |
|
$ |
867 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current |
|
|
|
|
Operating lease liability |
|
|
521 |
|
Noncurrent |
|
|
|
|
Operating lease liability, net of current portion |
|
|
421 |
|
Total lease liabilities |
|
$ |
942 |
|
|
|
|
|
|
Weighted average remaining lease term: |
|
1.83 years |
|
|
Weighted average discount rate: |
|
|
6 |
% |
Variable lease expense was approximately $93,000 and $153,000 for the years ended March 31, 2025 and 2024, respectively. Operating lease expense was approximately $503,000 for the years ended March 31, 2025 and 2024, respectively.
Cash outflows associated with the Company’s operating lease for the years ended March 31, 2025 and 2024 were $524,000 and $509,000, respectively.
Future lease payments relating to the Company’s operating lease liabilities as of March, 31, 2025 are as follows (in thousands):
Fiscal year ending March 31, 2026 |
|
|
538 |
|
Fiscal year ending March 31, 2027 |
|
|
460 |
|
Total future lease payments |
|
|
998 |
|
Less: Imputed Interest |
|
|
(56 |
) |
Total lease obligations |
|
|
942 |
|
Less: Current obligations |
|
|
(521 |
) |
Noncurrent lease obligations |
|
$ |
421 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jun 5, 2025 | Showing above |
| 2024 | May 31, 2024 | |
| 2023 | Jul 14, 2023 | |
| 2022 | Jun 10, 2022 | |
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.