Leases

3 Months Ended

Mar. 31, 2022

8. Leases

In January 2020, and amended in March 2020, the Company entered into a lease agreement for office and laboratory space in Seattle, Washington. The lease agreement is twelve months and provides for renewal options. The monthly base rent is approximately $16,000. The lease agreement is considered short-term and therefore, no right-of-use asset or lease liability has been recorded.

In December 2021, the Company entered into a lease agreement for corporate office and laboratory space in Seattle, Washington. The Company took possession of certain leased space at various dates in January 2022 and March 2022. The lease agreement expires in December 2027 and provides for a one-time option to extend for a period of five additional years. The lease agreement provides the Company with an allowance for tenant improvements of $5.3 million that will be reimbursed to the Company or paid on its behalf as construction of improvements occurs. The monthly base rent will be $0.2 million for the first year and will increase by 3.0% per year over the initial term. In addition, the Company is obligated to pay for common area maintenance and other costs. Under the terms of the lease agreement, the Company is required to maintain a standby letter of credit of $1.1 million at the execution of the lease agreement, reduced to $0.9 million at the first anniversary, and further reduced to $0.7 million at the second anniversary of the lease.

Classification of ROU assets and lease liabilities and the weighted-average remaining lease term and discount rate associated with operating leases are as follows ($ in thousands):


	As of March 31, 2022			As of December 31, 2021
ROU assets:
ROU assets - operating leases	$	3,309		$	—
Lease liabilities:
Current portion of operating lease liabilities		530			—
Noncurrent portion of operating lease liabilities		2,964			—
Total lease liabilities	$	3,494		$	—
Weighted-average remaining lease term (in years):
Operating leases		5.8			—
Weighted-average discount rate:
Operating leases		8.0	%		—

The components of lease costs are as follows (in thousands):


	Three Months Ended March 31,
	2022		2021
Operating lease costs	$	185	$	—
Short-term lease costs		141		14
Total lease costs	$	326	$	14

The maturities of lease liabilities and reconciliation to the present value of lease liabilities are as follows (in thousands):


	As of March 31, 2022
2022	$	—
2023		2,137
2024		2,201
2025		2,267
2026		2,335
Thereafter		2,405
Total undiscounted lease payments		11,345
Less: lease incentives		(5,301	)
Less: imputed interest		(2,550	)
Total lease liabilities		3,494
Less: current lease liabilities		(530	)
Lease liabilities, net of current portion	$	2,964