Business Context and Reporting Period
Company: Coherus BioSciences, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: July 6, 2015
Event: Entry into a new material definitive agreement (Office Lease) and termination of a prior material definitive agreement (Current Office Lease).
Key Financial Metrics and Obligations
This filing details specific lease obligations rather than operational financial performance metrics such as revenue or profit.
- New Lease Term: 84 months (7 years) commencing on or after October 22, 2015.
- New Lease Space: Approximately 27,532 square feet in Redwood City, California.
- Annual Base Rent (New Lease): Approximately $1.6 million in Year 1, increasing to approximately $1.9 million in the final year.
- Rent Abatements: Limited abatements provided in the second year of the lease term.
- Improvement Allowance: One-time allowance of approximately $1.2 million for design and construction.
- Security Instrument: Standby letter of credit of approximately $0.8 million (reducible to $0.3 million after 60 months if no default occurs).
- Termination Cost (Old Lease): $0 (No termination payment required).
Material Changes Versus Prior Period
The Company is relocating its principal executive offices from 201 Redwood Shores Parkway to 333 Twin Dolphin Drive, Redwood City, California.
- Current Lease Termination: The Company amended its existing lease (originally expiring April 30, 2017) to terminate early. The effective termination date is the later of October 25, 2015, or three business days after the new lease commencement.
- Cost Impact: The Company avoided a termination payment for the early exit of the previous lease.
Outlook, Risks, and Contingencies
Management Commentary: The filing indicates a strategic move to consolidate or expand operations in a new facility with a 7-year commitment.
Risks and Contingencies:
- Default Risk: The Landlord may draw down the $0.8 million letter of credit if the Company breaches any provisions of the New Lease.
- Commencement Uncertainty: The lease start date depends on the completion of landlord improvements or the Company's first business day in the premises, whichever is earlier, but not before October 22, 2015.
- Additional Costs: The Company remains obligated to pay certain costs, taxes, and operating expenses related to the new premises, subject to exclusions.
Important Facts for Investor Verification
- Verify the exact "Commencement Date" once the landlord completes improvements or the Company moves in, as this triggers the 84-month lease term and rent payments.
- Confirm the total cash outflow for the first year, considering the $1.6 million base rent plus estimated operating expenses and taxes.
- Monitor the status of the $1.2 million improvement allowance to ensure it covers the necessary build-out costs.
- Review the full lease agreement and amendment (to be filed in the Form 10-Q for the quarter ended June 30, 2015) for specific exclusions regarding operating expenses.