Leases

6 Months Ended

Jun. 30, 2024

LEASES

As a lessee, the Company leases approximately 51,000 square feet of office and laboratory space in Redwood City, California with a lease term that is set to end in September 2032. The Company has an option to renew all leased space for an additional five-year term at then-current market rates. In connection with the lease, the Company maintains a letter of credit issued to the lessor in the amount of $0.5 million as of each of June 30, 2024 and December 31, 2023, which is secured by restricted cash and is presented as noncurrent at each date based on the term of the underlying lease. In addition, the Company leases approximately 6,000 square feet of office space in San Diego, California under a lease that runs through September 2024.

The components of lease expense and supplemental information were as follows (in thousands):


	Three Months Ended June 30,					Six Months Ended June 30,
	2024		2023			2024		2023
Operating lease cost	$	1,038	$	1,038		$	2,076	$	2,076
Variable lease costs		289		(138	)		463		23
Short-term lease costs		9		10			12		20
Total lease costs	$	1,336	$	910		$	2,551	$	2,119


	Six Months Ended June 30,
	2024			2023
Weighted-average remaining lease term (in years)		8.2			9.1
Weighted-average incremental borrowing rate		6.2	%		6.2	%

Variable lease costs primarily consist of common area maintenance.

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


	Six Months Ended June 30,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities	$	2,018	$	1,965
Lease liability obtained in exchange for right-of-use assets	$	—	$	514

As of June 30, 2024, future minimum commitments under the Company’s non-cancelable facility operating leases are as follows (in thousands):


Years ending December 31,
2024 (remaining six months)	$	1,952
2025		3,846
2026		3,957
2027		4,072
2028		4,191
Thereafter		16,874
Total undiscounted future minimum lease payments		34,892
Present value adjustment for minimum lease commitments		(7,796	)
Total operating lease liabilities	$	27,096

As a lessor, the Company has contracts for equipment leased to customers. The Company accounts for the non-lease component under the revenue recognition ASC 606 guidance and the lease component under ASC 842 guidance.

For an arrangement that has been classified as a sales-type lease, revenue is recognized when the transfer of control of the underlying leased asset has occurred and the net investment lease recorded, which is calculated at the present value of the remaining lease payments due from the lessee. For an arrangement that has been classified as an operating lease, revenue is recognized on a straight-line basis over the lease term.