Leases

12 Months Ended

Dec. 31, 2022

8. Leases

In January 2020, and amended in March 2020, the Company entered into a 12-month lease agreement with renewal options for office and laboratory space in Seattle, Washington. The lease was terminated in June 2022. The lease agreement was considered short-term and therefore, no right-of-use asset or lease liability was 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 is reimbursed to the Company as construction of improvements occurs. Through December 31, 2022, the Company received $4.6 million of the tenant improvement allowance. The monthly base rent will be $0.2 million for the first year, beginning in October 2022, 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 in October 2023, and further reduced to $0.7 million in October 2024. In June 2022, the Company took possession of temporary office and laboratory space under a short-term lease that terminated in September 2022.

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 December 31, 2022
ROU assets:
ROU assets - operating leases	$	3,247
Lease liabilities:
Current portion of operating lease liabilities		2,137
Noncurrent portion of operating lease liabilities		6,658
Total lease liabilities	$	8,795
Weighted-average remaining lease term (in years):
Operating leases		5.0
Weighted-average discount rate:
Operating leases		8.0	%

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


	Year Ended December 31,
	2022		2021
Operating lease costs	$	983	$	—
Variable lease costs		144		—
Short-term lease costs		728		396
Total lease costs	$	1,855	$	396

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


	As of December 31, 2022
2023	$	2,137
2024		2,201
2025		2,267
2026		2,335
2027		2,405
Total undiscounted lease payments		11,345
Less: lease incentives		(530	)
Less: imputed interest		(2,020	)
Total lease liabilities		8,795
Less: current lease liabilities		(2,137	)
Lease liabilities, net of current portion	$	6,658