Company: RCUS
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001724521-25-000101
Chunk: 217

Company: Arcus Biosciences, Inc.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 1
Chunk 217
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 requirements for each tranche. Under the terms of this agreement, $50 million was drawn at closing and $50 million was drawn in the second quarter 2025, with an additional $50 million committed and fully available at our sole option in minimum increments of $25 million. A second tranche of $100 million will be available subject to future approval by Hercules.The term loans have an interest only period for the first 48 months from the agreement date and bear cash interest at a rate equal to the greater of (i) 10.45% or (ii) the prime rate plus 1.95%. The agreement allows us to defer up to 2.0% of the cash interest as payment-in-kind interest which is added to the principal at a 1.10 multiple. Effective July 1, 2025, we have elected the maximum payment-in-kind deferral.The aggregate future minimum payments due under the Hercules Agreement, including principal payments, payment-in-kind interest incurred to date, and the end of term charge, are as follows (in millions):Maturity DateAmount2028$30 202978 Total payments$108 

During the three and six months ended June 30, 2025, we recognized $1 million and $3 million of interest expense. The effective interest rate of the debt, including payment-in-kind interest, amortization of the debt discount, and issuance costs, was 13.08% commencing with the quarter ended June 30, 2025 compared to 13.39% for the quarters ended March 31, 2025 and prior. 

Note 12. Leases

The following table summarizes our cash and non-cash information related to our operating leases (in millions):Six Months Ended June 30,20252024Cash paid for amounts included in measurement of lease liabilities$9 $8 In the first quarter 2024, we evaluated our plans for a portion of our office space that we expected to sublease, and identified indicators of impairment to certain right-of-use assets associated with the leased space where the asset value was determined to be non-recoverable based upon a discounted cash flow analysis, resulting in an impairment charge of $20 million for the three months ended March 31, 2024 and the six months ended June 30, 2024.As of June 30, 2025 and December 31, 2024, we have provided deposits for letters of credit totaling $3 million to secure