In April 2021, the Company amended the non-cancelable operating lease for its corporate headquarters, which includes approximately 136,293 square feet of executive offices and research and development and business operations, in an office park in Hayward, California. The amended lease added 14,460 square feet of additional space in a new lease expected to commence in 2022, and extended the term of the existing leases through at least December 31, 2031. Once the lease of additional space commences, the

Company’s leased space in Hayward will total 150,753 square feet. Any extension periods defined under previous amendments were cancelled under the lease amendment and replaced by two options to extend the lease term for the entire 150,753 square feet then under lease in the Hayward premises for a period of eight years each. The Company also leases space in Brisbane, California under a non-cancelable operating lease that is expected to commence in the fourth quarter of 2021 and extend through December 31, 2031.

At September 30, 2021 the Company’s lease portfolio had a weighted average remaining term of 10.3 years. The leases require monthly lease payments that are subject to annual increases throughout the lease term. The optional extension periods have not been considered in the determination of the right-of-use assets or lease liabilities associated with this lease as the Company did not consider it reasonably certain it would exercise the option.

The weighted average discount rate for the Company’s lease portfolio at September 30, 2021 was 5.2%.

Lease expense is included in operating expenses in the condensed consolidated statements of operations and comprehensive loss. For the three and nine months ended September 30, 2021, the Company incurred lease expense of $1.5 million and $4.1 million, respectively, in relation to its operating leases. For the same periods in the prior year, the Company incurred lease expense of $0.7 million and $1.8 million, respectively. Lease costs include variable rent expense, which consists primarily of the Company’s proportionate share of operating expenses, property taxes, and insurance and is classified as lease expense due to the Company’s election to not separate lease and non-lease components. Short-term lease costs were zero and $0.3 million for the three and nine months ended September 30, 2021, respectively. The Company incurred zero and $0.1 million in short-term lease costs for the same periods in the prior year.

At September 30, 2021, the Company’s operating lease right-of-use asset totaled $35.6 million, and the operating lease liability totaled $51.7 million. The difference between the amount of the right-of-use asset and the lease liabilities relates to the incentives the Company received upon signing the original leases and its most recent amendment, of which approximately $10.8 million is expected to be received within one year of September 30, 2021 and is recorded in prepaid expenses and other current assets, net of the $2.8 million short-term portion of the operating lease liability. The long term portion of the lease liability was $48.9 million at September 30, 2021 and is reported on the balance sheet as operating lease liability, noncurrent.

As of September 30, 2021, the Company’s future minimum lease payments were as follows (in thousands):


	Operating
Year Ending December 31,	Leases
2021 (from October to December)	$	1,159
2022		5,722
2023		5,908
2024		6,101
2025		6,302
Thereafter		42,489
Total undiscounted future minimum lease payments		67,681
Less: Imputed interest		(15,905	)
Less: Tenant improvement allowance receivable		(10,785	)
Total operating lease liabilities		40,991
Tenant improvement allowance expected to be received in less than one year, net of current portion of lease liability (included in prepaid expenses and other current assets)		7,952
Operating lease liabilities, noncurrent	$	48,943

Total undiscounted future minimum lease payments do not include approximately $90.3 million and $5.3 million, respectively, related to the Company’s Brisbane lease and its additional space in Hayward, neither of which have yet commenced. The Brisbane lease is expected to commence during the fourth quarter of 2021 and the additional Hayward lease is expected to commence in 2022, both with terms through at least December 31, 2031.

The Company has provided deposits for letters of credit totaling $3.0 million to secure its obligations under its leases, which have been classified as restricted cash on the Company’s condensed consolidated balance sheet as of September 30, 2021.