8-KMaterial Agreements

DEXCOM INC 8-K Report, Material Agreement (Oct 6, 2014)

Filed October 6, 2014For Securities:DXCM

Summary

DexCom, Inc. (DXCM) has filed an 8-K report detailing a significant expansion of its office space through a Second Amendment to an existing Office Lease. The company has secured approximately 174,000 square feet of leased space across three buildings in San Diego, California, an increase from its current footprint. This expansion includes an additional 45,000 square feet, with an option to lease a further 45,000 square feet. The extended lease term now runs through March 2022, with the potential for further five-year extensions. The financial commitment for rent alone totals $33.0 million over the life of the lease, excluding additional costs for real estate taxes and operating expenses. The lease commencement for the additional space is contingent, with rent assumed to begin March 1, 2017, for the initially leased additional space. Importantly, DexCom retains the right to terminate the lease after a certain period and has options to extend the lease, offering strategic flexibility. This move indicates DexCom's growth and need for increased operational capacity.

Key Highlights

  • 1DexCom entered into a Second Amendment to its Office Lease agreement on October 1, 2014.
  • 2The company will now occupy approximately 174,000 square feet of office space in San Diego, CA, an increase of 45,000 square feet.
  • 3An additional 45,000 square feet of space is also available for DexCom to lease under the agreement.
  • 4The lease term has been extended through March 2022.
  • 5Total rent obligation over the lease term is approximately $33.0 million, excluding taxes and operating costs.
  • 6DexCom has the right to terminate the lease starting at the 55th month.
  • 7The company has options to extend the lease for two additional five-year periods.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose DexCom's entry into a material definitive agreement, specifically a Second Amendment to its Office Lease. This amendment involves expanding its leased office space and extending the lease term.

DexCom is increasing its leased office space by 45,000 square feet, bringing the total to approximately 174,000 square feet. The company also has the option to lease an additional 45,000 square feet.

The total obligation for rent under the life of the lease is $33.0 million. This amount excludes DexCom's share of real estate taxes and operating costs, which will be additional expenses.

Yes, DexCom has significant flexibility. They have the right to terminate the lease starting at the 55th month and can extend the lease for two additional five-year periods, subject to providing timely notice to the landlord.