Leases

12 Months Ended

Dec. 31, 2022

350 Treat Building Lease

In September 2017, the Company entered into a lease agreement (the “350 Treat Building Lease”) to lease approximately 26,125 square feet of office and warehouse space located in San Francisco, California for its corporate headquarters.

In November 2021, the Company entered into an amendment to the 350 Treat Building Lease agreement, whereby the parties agreed to extend the term of the lease for an additional four years and seven months and provided for an additional tenant improvement allowance. The total base lease payments for the extended period of 4.6 years equals $7.6 million. The amendment resulted in an adjustment of $5.5 million to the right-of-use asset and right-of-use operating lease liability which was recorded in November 2021. As of December 31, 2022 the remaining lease term is 4.7 years that expires on August 31, 2027. In addition to minimum lease payments, the lease requires the Company to pay associated taxes and operating costs.

The 350 Treat Building Lease is considered to be an operating lease as it does not meet the criteria of a finance lease. As of December 31, 2022, the operating lease right-of-use asset and operating lease liability were $5.6 million and $7.1 million, respectively. As of December 31, 2021, the operating lease right-of-use asset and operating lease liability were $6.6 million and $8.3 million, respectively. The discount rate used to determine the lease liability was 3.7%.

2741 16th Street Lease

In September 2017 the Company entered into a lease agreement (the “2741 16th Street Lease”) to lease approximately 20,032 square feet of office space and 25,000 of parking space located in San Francisco, California.

In May 2020, the Company entered into an amendment to the 2741 16th Street Lease agreement, whereby the parties agreed to extend the term of the lease for an additional four years, restructure the monthly rent payable under the lease and provide for an additional tenant improvement allowance. The total base lease payments for the extended period of 4.0 years equals $8.5 million and the increase in total base lease payments for the lease term provided for by the original agreement is $0.7 million. The amendment resulted in an adjustment of $6.2 million to the right-of-use asset and right-of-use operating lease liability which was recorded in May 2020. As of December 31, 2022 the remaining lease term is 4.7 years that expires on August 31, 2027. In addition to minimum lease payments, the lease requires the Company to pay associated taxes and operating costs.

The 2741 16th Street Lease is considered to be an operating lease as it does not meet the criteria of a finance lease. As of December 31, 2022, the operating lease right-of-use asset and lease liability were $6.5 million and $8.7 million, respectively. As of December 31, 2021, the operating lease right-of-use asset and operating lease liability were $7.7 million and $10.1 million, respectively. The discount rate used to determine the operating lease liability was 5.25%.

Other operating real estate leases

The Company has executed or assumed as lessee other five operating leases for rental of office space. The terms of those leases range from 1 to 3 years. The Company is obligated to make lease payments totaling approximately $0.9 million for those leases over the respective lease terms.

Total operating lease cost for the years ended December 31, 2022, 2021 and 2020 was $3.9 million, $3.6 million and $2.9 million, which consisted of $3.8 million, $3.0 million and $2.6 million of fixed lease expense and $0.1 million, $0.6 million and $0.3 million of variable lease expense, respectively. Cash paid for amounts included in the measurement of lease liabilities was $4.0 million, $4.2 million and $3.5 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The following table presents the weighted average remaining lease term and discount rate for leases:


	December 31,
	2022		2021
Weighted-average remaining lease term	4.52		5.53
Weighted-average discount rate	4.66	%	4.55	%

The maturities of the operating lease liabilities as of December 31, 2022 were as follows (in thousands):


Year ending December 31,
2023	$	3,981
2024	4,072
2025	3,967
2026	4,019
2027 and thereafter	2,733
Total undiscounted lease payments	18,772
Less: imputed interest	(2,151)
Total operating lease liabilities	$	16,621