Leases

12 Months Ended

Dec. 31, 2022

The Company leases office and laboratory space in Monrovia, California under two separate leases that expire in January 2023 and December 2025, respectively with an option to renew for an additional five years at then market rates. The Company has assessed that it is unlikely to exercise the lease term extension option. For the year ended December 31, 2022, ROU assets obtained in exchange for new operating lease liabilities are $0.3 million.

The Company leases additional office space in San Diego, California through August 2022, with an option to extend for an additional five years. In May 2022, the Company entered into an amendment to the lease to extend the lease term through December 31, 2023. The Company has assessed that it is unlikely to exercise the option to extend the lease term.

In June 2021, the Company entered into an 18-month lease for office space in Monrovia, California. The lease began August 1, 2021 and terminated January 31, 2023. ROU assets obtained in exchange for new operating lease liabilities are $0.3 million

In June 2021, the Company entered into an Agreement of Lease (the Halstead Lease) relating to 129,543 rentable square feet, for laboratory and office space, in Pasadena, California, where the Company intends to move its corporate headquarters in the first quarter of 2023. The term of the Halstead Lease will become effective in two phases. The first phase commences on July 14, 2021 and encompasses 83,083 square feet while the second phase commences no later than July 1, 2025 and encompasses an additional 46,460 square feet. The term of the Halstead Lease is 13 years from the first phase commencement date. The Company received delivery of the first phase premises on July 1, 2021 and is scheduled to complete construction of office, laboratory, and related improvements in the second half of 2022. The Halstead Lease provides the Company with improvement allowances of up to $17.0 million and $3.3 million in connection with the Phase 1 and Phase 2 building improvements, respectively. The initial base monthly rent is $386,336, or $4.65 per square foot, and

includes increases of three percent annually. The Company will also be responsible for its proportionate share of operating expenses, tax expense, and utility costs.

In July 2021, the Halstead Lease was amended to clarify the start date of the new lease to August 1, 2022 and to amend other provisions of the Halstead Lease to reflect the new start date of the lease. In August 2022, the Halstead lease was amended to increase the amount of the tenant allowance by$5.0 million with a corresponding increase in total rental payments. The Company is eligible to receive total tenant allowance under the lease for the phase 1 space of $22.0 million and the initial base rent is increased to $416,246 , or $5.01 per square foot. For the year ended December 31, 2021, ROU assets obtained in exchange for new operating lease liabilities are $29.7 million.

The Company received delivery of the second phase premises on December 1, 2022. For the year ended December 31, 2022, ROU assets obtained in exchange for new operating lease liabilities are $15.3 million.

The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants.

The following table reconciles the undiscounted cash flows for the operating leases at December 31, 2022 to the operating lease liabilities recorded on the balance sheet (in thousands):


Years ending December 31,
2023	$	6,558
2024	6,072
2025	7,392
2026	8,589
2027	8,829
Thereafter	75,512
Total undiscounted lease payments	112,952
Less: Tenant allowance	(5,459)
Less: Imputed interest	(47,859)
Present value of lease payments	$	59,634

Lease liabilities - short-term	$	4,708
Lease liabilities - long-term	54,926
Total lease liabilities	$	59,634

The following table summarizes lease costs, cash, and other disclosures for the years ended December 31, 2022, 2021, and 2020 (in thousands):


	Year Ended December 31,
	2022			2021			2020

Operating lease cost	$	6,588		$	4,342		$	2,503
Variable lease cost	506			58			150
Total lease costs	$	7,094		$	4,400		$	2,653
Cash paid for amounts included in
the measurement of lease liabilities	$	2,869		$	2,773		$	2,233
Weighted-average remaining lease term
—operating leases (in years)	12.0			12.3			7.4
Weighted-average discount rate
—operating leases	8.9		%	5.8		%	5.5		%