Leases

3 Months Ended

Mar. 31, 2023

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 on September 30, 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 March 31, 2023 and December 31, 2022, 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 pursuant to a lease that runs through September 2024.

As of March 31, 2023, the remaining weighted-average lease term was 9.4 years and the weighted-average incremental borrowing rate used to determine the operating lease liabilities was 6.2%.

The components of lease costs related to the Company’s operating leases were as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Operating lease costs	$	1,038	$	813
Variable lease costs	161		194
Short-term lease costs	10		69
Total lease costs	$	1,209	$	1,076

Variable lease costs are primarily comprised of common area maintenance.

As of March 31, 2023, future minimum commitments under the Company’s non-cancelable facility operating lease are as follows:


Years ending December 31,	(in thousands)
2023 (remaining nine months)	$	2,961
2024	3,969
2025	3,846
2026	3,957
2027	4,072
Thereafter	21,065
Total undiscounted future minimum lease payments	39,870
Present value adjustment for minimum lease commitments	(9,998)

Total operating lease liabilities	$	29,872

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.

Revenue related to lease components from operating leases is presented as grant and other revenue and was $40,000 and nil for the three months ended March 31, 2023 and 2022, respectively.