Business Context and Reporting Period
Xeris Biopharma Holdings, Inc. filed a Form 8-K dated October 3, 2022, reporting events occurring on September 29, 2022. The filing concerns an amended and restated lease for expanded office and laboratory facilities and a related amendment to the company’s credit agreement. It does not report quarterly operating results.
Material Agreements and Financial Obligations
- Amended lease: Wholly owned subsidiary Xeris Pharmaceuticals, Inc. will lease approximately 87,032 square feet at 1375 West Fulton Street, Chicago, Illinois, including its existing laboratory space.
- Timing and term: The expansion lease is scheduled to commence upon substantial completion of landlord improvements and no earlier than April 1, 2023. The entire lease is expected to expire on the earlier of the last day of the 156th full calendar month after the expansion commencement date and March 31, 2037, unless extended or terminated earlier.
- Renewal options: Xeris Pharma may extend the lease for two successive five-year periods, subject to the lease terms.
- Rent: Annual base rent following commencement is $52.50 per rentable square foot in the first year, with 2.5% annual increases. Base rent and Xeris Pharma’s share of operating expenses and taxes are abated for the first 12 months for the entire premises, with an additional six months of abatement for a portion of the premises.
- Landlord contributions: The landlord will fund turnkey improvements to the expansion space and provide a $100-per-rentable-square-foot allowance on approximately 63,173 square feet for specified relocation, occupancy, improvement, equipment, furniture, signage, legal and other lease-related costs. The allowance cannot be used to pay rent.
- Letter of credit: Xeris Pharma will increase its existing letter of credit supporting lease obligations from $408,262.50 to $3,247,807.50.
- Credit agreement amendment: Amendment No. 1 to the March 8, 2022 Credit Agreement and Guaranty provides lender consent for issuance of the letter of credit to the landlord.
Management Plans, Changes, and Risks
- The company intends to relocate its corporate headquarters to 1375 West Fulton Street in the first half of 2023, making it the company’s sole office location.
- The company has begun marketing its current headquarters at 180 N. LaSalle Street, Chicago, for potential sublease, subject to acceptable terms. The filing does not provide expected sublease proceeds or confirm that a subtenant has been secured.
- The lease includes customary default provisions, including payment defaults and bankruptcy events.
- The filing creates or modifies material financial obligations through the long-term lease and increased letter-of-credit commitment. The filing text does not provide the lease’s total undiscounted commitment, accounting lease liability, or expected cash impact.
Financial Metrics
The filing does not provide revenue, profit, cash flow, margins, debt balances, liquidity measures, financial guidance, or other operating performance metrics.
Important Facts to Verify
- Substantial completion and the actual expansion commencement date.
- Final lease accounting treatment, including right-of-use assets, lease liabilities, rent expense, and any required disclosures in the subsequent Form 10-Q.
- Issuance and continuing collateral requirements of the $3.25 million letter of credit.
- Whether the current headquarters is successfully subleased and the resulting effect on occupancy costs.
- Final terms of the full lease and Credit Agreement amendment, which the company stated would be filed as exhibits to its Form 10-Q for the quarter ended September 30, 2022.