Leases

9 Months Ended

Sep. 30, 2022

In February 2018, the Company entered into a non-cancelable lease agreement (the “Lease”) for premises consisting of approximately 32,974 square feet located in South San Francisco, California (the “Premises”). The Company moved into the Premises in July 2018. The Premises is being used for the Company’s corporate headquarters and principal operating facility. The term of the Lease is eighty-four months, which commenced on July 1, 2018. Base rent was abated for the first two months of the lease term and thereafter is $0.2 million per month during the first year of the lease term, with specified annual increases thereafter. The Company paid a refundable security deposit of approximately $0.4 million, which is included in other non-current assets in the condensed balance sheets at September 30, 2022 and December 31, 2021. The Company has the right to extend the lease term by seven years upon written notice not more than twelve months nor less than nine months prior to the expiration of the original lease term, with monthly payments equal to the “fair rental value” as defined in the Lease. The exercise of lease renewal options is at the sole discretion of the Company and is not included in the right-of-use (ROU) asset and lease liability as it is not reasonably certain of exercise. This lease does not contain material variable rent payments, residual value guarantees, covenants, or other restrictions.

In August 2022, the Company entered into a non-cancelable lease agreement for premises consisting of approximately 12,456 square feet located in South San Francisco, California. The premises is being used as additional office space for the Company. The term of the lease is 18 months, which commenced on August 1, 2022. Base rent is $0.1 million per month during the first year of the lease term, with specified annual increases of 3% thereafter. The Company has the right to extend the lease term by three years with monthly payments equal to the market rate of rent. The exercise of lease renewal options is at the sole discretion of the Company and is not included in the right-of-use (ROU) asset and lease liability as it is not reasonably

certain of exercise. This lease does not contain material variable rent payments, residual value guarantees, covenants, or other restrictions.

For each of the three months ended September 30, 2022 and 2021, the Company recognized expenses associated with the operating leases of $0.7 million. For the nine months ended September 30, 2022 and 2021, the Company recognized expenses associated with the operating leases of $1.8 million and $1.7 million, respectively. Additionally, the Company incurred variable lease costs of $0.1 million and $0.2 million, and $0.4 million and $0.7 million, for the three and nine months ended September 30, 2022 and 2021, respectively, which is comprised primarily of the Company's proportionate share of operating expenses, property taxes, and insurance. Short-term lease expense and variable lease payments recorded in operating expenses were immaterial for the three and nine months ended September 30, 2022 and 2021. Cash paid for amounts included in the measurement of operating lease liabilities was $1.9 million for both the nine months ended September 30, 2022 and 2021, respectively.

The undiscounted future non-cancellable lease payments of the Company's operating lease liabilities as of September 30, 2022 were as follows (in thousands):


Quarter ending September 30, 2022:	Operating Lease
2022 (remainder of the year)	$	773
2023	3,080
2024	2,422
2025	1,203
2026	—
Total undiscounted lease payments	$	7,478
Less: Present value discount	703
Total current operating lease liabilities	$	2,649
Total non-current operating lease liabilities	$	4,126

The weighted-average remaining lease terms and discount rates related to the Company's operating leases were as follows:


						As of September 30, 2022
Weighted-average remaining lease term (in years)						2.50
Weighted-average discount rate						8.2%