Operating Leases

9 Months Ended

Sep. 30, 2024

In April 2019, the Company entered into a twenty-eight month facility lease agreement for office space in Pacific Palisades, California (the “Pacific Palisades Lease”). The Pacific Palisades Lease commenced on May 1, 2019, included four months of rent abatement and a rent escalation clause and was set to expire on August 31, 2021. In August 2021, the Company exercised its option to extend the term of the Pacific Palisades Lease for an additional three-year period and entered into an amendment to the lease agreement (the “Pacific Palisades Lease Amendment”). Pursuant to the Pacific Palisades Lease Amendment, the Company and the landlord agreed to extend the term for an additional period of three (3) years and six (6) months, until February 28, 2025, with an option to renew for an additional three (3) years in accordance with the terms of the Pacific Palisades Lease. Included in the Pacific Palisades Lease Amendment were nine months of rent abatement and a rent escalation clause.

In April 2022, the Company entered into a lease agreement for office space in Morristown, New Jersey (the “Morristown Lease”). The Morristown Lease has a term of seventy-three months, unless terminated sooner, and includes rent abatement for the first three months and the forty-seventh and forty-eighth calendar months after lease commencement. Included in the Morristown Lease are fixed rent escalations of approximately 2% on each anniversary year of the lease term.

The following table summarizes information related to the Company’s leases (in thousands):


	September 30, 2024		December 31, 2023
Assets:
Operating lease right-of-use assets	$	886	$	1,169

Liabilities:
Operating lease liabilities, current	$	322	$	434
Operating lease liabilities, non-current	624		833
Total operating lease liabilities	$	946	$	1,267

Rent expense for the three and nine months ended September 30, 2024 and 2023 is presented on the following table (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating leases rent expense	$	115	$	115	$	345	$	346

Cash paid for leases and included in operating cash flows for the nine months ended September 30, 2024 and 2023 is presented on the following table (in thousands):


	Nine Months Ended September 30,
	2024		2023
Cash paid included in operating cash flows	$	383	$	375

The future minimum lease payments required under the operating leases as of September 30, 2024, are summarized below (in thousands):


Future Minimum Lease Payments:
2024	$	130
2025	320
2026	231
2027	280
2028	109
Total minimum lease payments	$	1,070
Less: amount representing interest	(124)
Present value of operating lease liabilities	$	946
Less: operating lease liabilities, current	(322)
Operating lease liabilities, non-current	$	624
Remaining lease term (in years)	3.33
Incremental borrowing rate	7.62		%