The Company has multiple facility leases in San Diego, California, for office and laboratory space, including a cGMP manufacturing center, under non-cancellable operating leases with various expiration dates through 2029.

The Company leases certain office space in San Diego, California, under a non-cancelable operating lease, with a term through December 2025 (the “Executive Drive Lease”). The lease agreement for 13,405 square feet commenced on December 23, 2019, with a six-year initial term and includes aggregate monthly payments to the lessor of $2.8 million. The Executive Drive Lease also provides for rent abatements and scheduled increases in base rent. In connection with the lease, the Company made a one-time cash security deposit in the amount of $0.4 million, of which $0.2 million was refunded in October 2021, and the remaining $0.2 million is refundable at the end of the lease term and is included in other long-term assets in the Company’s balance sheets. The Executive Drive Lease includes a renewal option, which includes an option to renew for five additional years. The Company will not exercise the option and, as such, is not reflected as part of the ROU asset and associated lease liabilities.

In June 2021, the Company entered into a lease agreement for 51,621 square feet of office and laboratory space, and a cGMP manufacturing center in San Diego, California (the “Morehouse Lease”), which represented a portion of a new facility that was under construction. The construction and design of the asset was the primary responsibility of the lessor. The Company was involved in certain aspects of construction and design for certain interior features and leasehold improvements that will be beneficial to the Company to better suit its business needs and intended purpose of the space. The Morehouse Lease is accounted for as an operating lease and commenced in the second quarter of 2022 (office and laboratory space) and in the third quarter 2022 (cGMP manufacturing center). The Morehouse Lease has an initial term of 88 months and includes aggregate monthly payments to the lessor of approximately $23.2 million with a rent escalation clause, and a tenant improvement allowance of approximately $12.3 million. The lease agreement required the Company to provide an unconditional and irrevocable letter of credit in the amount of $0.2 million, which is recorded as restricted cash on the Company’s balance sheets as of December 31, 2024 and 2023.

In August 2022, the Company entered into a lease agreement to use designated laboratory and vivarium space in San Diego, California (the “Explora Lease”). The Explora Lease is accounted for as an operating lease and commenced in August 2022. The Explora Lease has an initial term of 36 months and includes aggregate monthly payments to the lessor of approximately $0.8 million with a rent escalation clause.

The following table presents operating rent expense and related short-term lease costs (in thousands):


	YEAR ENDED DECEMBER 31,
	2024		2023
Rent expense	$	4,052	$	4,113
Variable lease expense		2,029	$	2,329
Amount of rent expense related to short-term leases		—		286

Future minimum annual obligations under the Company’s operating leases with terms in excess of one year are as follows (in thousands):


Year Ended December 31,
2025		4,070
2026		3,529
2027		3,520
2028		3,626
2029		2,291
Total minimum lease payments		17,036
Less: amount representing interest		(2,848	)
Present value of operating lease liabilities		14,188
Less: operating lease liabilities, current		(3,618	)
Operating lease liabilities, net of current portion	$	10,570

As the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on average discount rate, which were as follows:


	AS OF
	DECEMBER 31, 2024			DECEMBER 31, 2023
Weighted-average remaining lease term	4.4 years			5.3 years
Weighted-average discount rate		7.7	%		7.8	%

On July 22, 2022, the Company entered into a sublease (the “Sublease Agreement”) with Origis Operating Services, LLC, (the “Sublessee”), whereby the Company agreed to sublease to Sublessee all of the 13,405 rentable square feet of office space in San Diego, California currently leased by the Company under the Executive Drive Lease. The sublease commenced on August 1, 2022, and has a term through December 31, 2025. The aggregate base rent is approximately $2.6 million commencing August 1, 2022. The Company records sublease income as a reduction of general and administrative expense.

The expected undiscounted cash flows to be received from the sublease are as follows (in thousands):


PERIOD ENDED DECEMBER 31,
2025	$	873
Total	$	873

The Company recognized sublease income of $0.8 million for each of the years ended December 31, 2024 and 2023.