In November 2018, we entered into a lease agreement for office space in Thousand Oaks, California, that expires in February 2026 and for which we have the option to extend the lease for an additional period of five years after the initial term. In February 2025, we vacated this office space prior to the termination of the lease, resulting in the right-of-use asset to be abandoned. When a lease right-of-use asset has been abandoned, the estimated useful life of the asset is updated to reflect the cease use date, and the remaining carrying value of the asset is amortized ratably over the period between the commitment date and the cease use date. For the three months ended March 31, 2025, we recognized an acceleration of amortization expense on the abandoned right-of-use asset in the amount of $1.0 million within general and administrative expenses on the accompanying condensed consolidated statements of operations and comprehensive income (loss).

. In March 2021, we entered into a lease agreement for the 33,659 square feet of office, lab and warehouse space at ARC. During the third quarter of 2021, the initial 10.5-year lease term commenced, upon substantial completion of the landlord’s work as defined under the agreement. Base rent is subject to annual increases of 3% with each annual anniversary of the rent commencement date. We have the option to extend this lease for two additional five-year periods after the initial term. In March 2025, we announced a pause on our CAR-T research and development activities. As a result, we are winding down activities at the ARC lab and actively seeking to sublease the facility. We considered this to be a triggering event and performed an impairment analysis on the right-of-use asset. For the three months ended March 31, 2025, we recorded a non-cash impairment of the right-of-use asset of $4.1 million, representing the amount by which the carrying value of the right-of-use asset exceeded its estimated fair value. We recorded the impairment loss within research and development expenses on the accompanying condensed consolidated statements of operations and comprehensive income (loss).

Additionally, in 2021, we entered into an amended lease agreement (Aurora Lease) for our office and lab space in Aurora, Colorado, to add additional lab space and in November 2023, we further amended the Aurora Lease to extend the term to April 2025. Effective March 31, 2025, we entered into a sub-lease agreement with Pierre Fabre for this office and lab space. The original lease agreement and sub-lease agreement expired on April 30, 2025.

In February 2017, we entered into a lease agreement (the ATOM Lease) for approximately 90,580 square feet of office, lab and cellular therapy manufacturing space in Thousand Oaks, California (the ATOM Facility). The initial 15-year term of the headlease commenced on February 15, 2018, upon the substantial completion of landlord’s work as defined under the agreement. In April 2022, we assigned the ATOM Lease to FDB in connection with the closing of the sale of the ATOM Facility to FDB. Under ASC 842, we are considered to be the sub-lessor of the ATOM Lease. We have not received novation from the landlord and therefore have not been relieved of our primary obligations under the headlease. Therefore, the ROU asset and lease liability for the ATOM Facility remain on our balance sheet.

We evaluated our vendor contracts to identify embedded leases and determined that the Master Services and Supply Agreement (Fujifilm MSA) we entered into with FUJIFILM Diosynth Biotechnologies California, Inc. (FDB) contained items that constituted a lease under ASC 842, Leases, as Atara has the right to substantially all of the economic benefits from the use of the asset and can direct the use of the asset. We concluded that the Fujifilm MSA contains an embedded operating lease for certain dedicated processing rooms for the manufacturing of Atara product and an embedded finance lease for certain freezers dedicated for our use. The Fujifilm MSA includes contractual obligations in the form of payments for the processing rooms and the freezers, each over a term of five years. As a result, we added ROU assets and lease liabilities for the processing rooms and freezers for the initial term of the lease in the amounts of $50.8 million and $4.8 million, respectively. In November 2023, we agreed to forego the use of one processing room for approximately one year in return for a reduction in contractual obligations under the Fujifilm MSA, and in November 2024, we exercised the option to release the processing room to FDB for the remainder of the initial term. While the Fujifilm MSA was assigned to Pierre Fabre in March 2025 as part of the A&R Commercialization Agreement Amendment, we have not been relieved of our primary obligations under the Fujifilm MSA.

Therefore, the ROU asset and lease liability for the processing rooms and the finance lease asset and liability for the freezers remain on our balance sheet.

Given the continued use of the ATOM lease and the Fujifilm MSA embedded leases by another party, we did not consider there to be a trigger for valuation considerations following our restructuring activities.

We lease office space in South San Francisco, California under a non-cancellable lease agreement. In December 2021, we entered into a second amendment with the landlord to extend the lease term through May 2025. The amended lease agreement does not include an option to extend the lease term. In connection with the amended lease, we are required to maintain a letter of credit in the amount of $0.1 million to the landlord. In October 2022, we entered into a sub-lease agreement with a third party for this office space. The sub-lease term commenced in November 2022 and expires in May 2025, with no option to extend the sub-lease term. We have not received novation from the landlord and therefore have not been relieved of our primary obligations under the headlease. Therefore, the ROU asset and lease liability for the South San Francisco office remain on our balance sheet.

The maturities of lease liabilities under our operating and finance leases as of March 31, 2025 were as follows:


	Operating Leases			Finance Leases
Years Ending December 31,	(in thousands)
2025		12,590			947
2026		15,677			1,285
2027		5,494			436
2028		3,319			—
2029		3,415			—
Thereafter		9,044			—
Total lease payments	$	49,539		$	2,668
Less: amount representing interest		(9,985	)		(280	)
Present value of lease liabilities	$	39,554		$	2,388

Balance as of March 31, 2025
Other current liabilities	$	12,846		$	1,070
Operating lease liabilities - long-term		26,708			—
Other long-term liabilities		—			1,318
Total	$	39,554		$	2,388

The components of lease cost were as follows:


	Three Months Ended March 31,
	2025		2024
	(in thousands)
Operating lease cost:
Operating lease cost	$	3,747	$	4,293
Short-term lease cost		42		48
Total operating lease cost	$	3,789	$	4,341
Finance lease cost:
Amortization expense	$	240	$	240
Interest on lease liabilities		66		90
Total finance lease cost	$	306	$	330

Other information related to leases was as follows:


	Three Months Ended March 31,
	2025			2024
	(in thousands, except lease term and discount rate)
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	4,139		$	3,993
Operating cash flows for finance leases		66			90
Financing cash flows for finance leases		250			227

Weighted Average Remaining Lease Term
Operating leases		4.6			5.0
Finance leases		2.0			3.0
Weighted Average Discount Rate
Operating leases		11.1	%		11.4	%
Finance leases		10.4	%		10.4	%