In April 2024, Gyre Pharmaceuticals entered into a lease arrangement for its new corporate headquarters, an approximately 2,130 square meter office space in Beijing, PRC, which lease is set to expire in June 2027. The lease for Gyre Pharmaceuticals’ former corporate headquarters, a 968 square meter office space in Beijing, PRC, expired in June 2024. In 2022, Gyre Pharmaceuticals secured a lease for an office space of approximately 180 square meters in Zhengzhou, PRC, which was renewed in July 2024 and is set to expire in August 2026. In November 2023, the Company secured a lease for its U.S. headquarters in San Diego, California, with the lease set to expire in the first quarter of 2027.

The Company also has multiple short-term leased properties used as offices and employee dormitories. The Company recorded a total of $17,000 and $23,000 in short-term rent expenses during the three months ended June 30, 2024 and 2023, respectively. The Company recorded a total of $35,000 and $49,000 in short-term rent expenses during the six months ended June 30, 2024 and 2023, respectively. The short-term rent expense amounts are recorded in operating expenses in the accompanying condensed consolidated statements of operations and comprehensive income.

As of June 30, 2024, the Company recorded an aggregate right-of-use asset of $2.1 million and an aggregate lease liability of $2.0 million in the accompanying condensed consolidated balance sheets.

For the three months ended June 30, 2024 and 2023, the Company’s operating lease expense was $0.1 million and $0.1 million, respectively. For the six months ended June 30, 2024 and 2023, the Company’s operating lease expense was $0.3 million and $0.2 million, respectively. Variable lease payments for the three and six months ended June 30, 2024 and 2023 were immaterial.

Supplemental cash flow information related to operating leases was as follows (in thousands):


	Six Months Ended June 30,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities	$	383	$	243

The present value assumptions used in calculating the present value of the lease payments were as follows:


	June 30, 2024			December 31, 2023
Weighted-average remaining lease term	2.9 years			2.2 years
Weighted-average discount rate		4.76	%		4.78	%

As of June 30, 2024, undiscounted future minimum payments under the Company’s operating leases were as follows (in thousands):


	Amount
Remaining in 2024	$	474
2025		735
2026		598
2027		281
Total undiscounted lease payments		2,088
Less: imputed interest		(132	)
Total lease liabilities		1,956
Less: current portion of lease liabilities		(659	)
Lease liabilities, net of current portion	$	1,297

The Company is required to maintain security deposits of $0.4 million in connection with various leases, which amounts are included in other assets, noncurrent on the Company’s condensed consolidated balance sheets.

As of June 30, 2024, the Company held land use rights for two land parcels in Beijing’s Shunyi District, expiring in 2053, and in Cangzhou, Hebei Province, expiring from 2067 to 2070. These parcels, with a combined area of approximately 66,559 square meters, are utilized as manufacturing facilities. As of June 30, 2024, the aggregate recorded land use rights, net assets for these parcels was $1.5 million.