The Company leases its headquarters with its main offices and laboratory facilities in Redwood City and San Carlos, California.

In September 2022, the Company entered into a thirty-month sub-lease agreement for office space located at 900 Middlefield Road, 4th Floor, Redwood City, California, which commenced in January 2023 and expires in July 2025. In connection with the sub-lease, the Company made a security deposit of $2.1 million which is included in other assets on the balance sheet at December 31, 2023. Upon commencement, the Company recognized a right-of-use asset and lease liability of $6.0 million, discounted at 11.5%, the Company’s estimated incremental borrowing rate.

In November 2021, the Company entered into a four-year lease for additional lab space located at 1585 Industrial Road, San Carlos, California which commenced in January 2023 and expires in January 2027. Under the provisions of the agreement, upon the commencement date, the term of the lab space located at 1599 Industrial Road, San Carlos, California (1599 lease), was also extended from April 2026 to January 2027. The lease included a renewal option for an additional five years until January 2032, which has been included in the determination of the right-of-use as of December 31, 2023. As the term of the 1599 lease was extended, this did not result in a separate contract, accordingly, the Company remeasured the right-of-use asset and lease liability totaling to $7.8 million under one lease, discounted at 11.4%, the Company’s estimated incremental borrowing rate. In addition, the lease included a lease incentive in the form of a tenant improvement allowance of up to $1.5 million. In November 2023, the Company submitted a claim of approximately $1.5 million against tenant improvement allowance reimbursement in connection with its operating lease for lab space located at 1585 Industrial Road, San Carlos, California which was received in January 2024. Of the total reimbursement, approximately $0.4 million constitutes a loan required to be repaid in the form of additional lease payments over the remaining lease term at an annual interest rate of 7%, which requires remeasurement of lease liability and related right-of-use asset on receipt. The Company has determined that impact of the remeasurement to be immaterial. The remaining $1.1 million are recognized as receivable as of December 31, 2023 and are presented as a reduction of the operating lease liabilities on the balance sheet at December 31, 2023.

The following table summarizes the lease costs and cash paid for the Company’s leases (in thousands):


	December 31,
	2023		2022		2021

Cash paid for operating lease liabilities	$	2,469	$	700	$	346
Operating lease costs		4,099		711		482
Short-term lease costs		—		2,921		671
Variable lease costs		1,326		357		105

Supplemental balance sheet information related to operating leases is as follows:


	December 31,
	2023			2022			2021
Weighted average remaining lease term		5.6			3.3			4.3
Weighted average discount rate		10.9	%		5.4	%		5.4	%

Maturities of lease liabilities as of December 31, 2023 were as follows (in thousands):


	Operating Lease
Year Ending December 31,	Commitments
2024		4,054
2025		2,757
2026		1,380
2027		1,431
2028		1,474
Thereafter		4,826
Total undiscounted lease payments		15,922
Less: Present value adjustments		(4,488	)
Less: Tenant improvement allowance yet to be received		(1,138	)
Total operating lease liabilities	$	10,296
Operating lease liabilities, current		2,466
Operating lease liabilities, non-current (1)		7,830
Total operating lease liabilities (1)	$	10,296

(1) Total operating lease liabilities are presented net of tenant improvement allowances yet to be received which exceeds the minimum lease payments to be paid over the next 12 months. As such, the current portion of the related lease liability is fully reduced and the noncurrent portion of the related lease liability is reduced by the remaining portion of the lease incentive yet to be received.

The Company, from time to time, may be party to litigation arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the years ended December 31, 2023 and 2022, and, to the best of its knowledge, no material legal proceedings are currently pending or threatened.

The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the fair value of these agreements is not material.

The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ insurance.