8-KMaterial Agreements

DEXCOM INC 8-K Report, Material Agreement (Aug 23, 2010)

Filed August 23, 2010For Securities:DXCM

Summary

DexCom, Inc. (DXCM) filed an 8-K on August 23, 2010, reporting a material definitive agreement related to its office lease. The company entered into a First Amendment to Office Lease with Kilroy Realty, L.P. for approximately 102,844 square feet of space located at 6340 and 6310 Sequence Drive in San Diego, California. This amendment extends the lease term through November 30, 2016. The total rent obligation over the life of the lease, excluding real estate taxes and operating costs, amounts to approximately $14.9 million. The annual rent escalates over the lease term, starting at $1,870,651.20 for the period of September 1, 2010, to August 31, 2011, and concluding at $699,500.88 for the final portion of the term ending November 30, 2016. DexCom also retains the general right to extend the lease for an additional five years, provided it is not in default. This filing primarily concerns the company's operational footprint and long-term commitment to its facilities. Investors should note this as an indicator of DexCom's ongoing operational stability and its commitment to its San Diego-based headquarters. The lease amendment secures the company's office space for the foreseeable future, which is crucial for business continuity and growth.

Key Highlights

  • 1DexCom, Inc. entered into a First Amendment to Office Lease on August 18, 2010.
  • 2The lease agreement is with Kilroy Realty, L.P. for facilities at 6340 and 6310 Sequence Drive, San Diego, California.
  • 3The leased space totals approximately 102,844 square feet.
  • 4The lease term is extended through November 30, 2016.
  • 5The total rent obligation over the lease term is approximately $14.9 million, excluding real estate taxes and operating costs.
  • 6DexCom has the general right to extend the lease for an additional five years.
  • 7The filing indicates a commitment to maintaining its operational facilities.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report DexCom, Inc.'s entry into a material definitive agreement, specifically an amendment to its office lease for its facilities in San Diego, California. This amendment extends the lease term and outlines the associated rental obligations.

The total obligation for rent under the life of the lease, excluding real estate taxes and operating costs, is approximately $14.9 million ($14,899,503.93). This commitment spans from September 1, 2010, through November 30, 2016.

Yes, provided DexCom is not in default under the agreement and the agreement is still in effect, the company generally has the right to extend the lease for an additional five years by providing notice to the landlord before the end of the initial lease term.

This lease amendment signifies DexCom's commitment to its current operational facilities for the long term, extending through late 2016. It provides a degree of operational stability and indicates the company's confidence in its ongoing business needs at this location. Investors can view this as a confirmation of management's planning for continued operations and potential growth.