Leases

12 Months Ended

Dec. 31, 2022

The Company has an operating lease agreement for office space with an initial term expiring in 2030 (the “Lease”). The Lease terms provide for an option to extend or terminate the Lease, with extension terms that extend the lease term by five years. The Lease includes escalating rent payment provisions.

On March 17, 2022, the Company entered into a sublease agreement (the “Sublease”) for additional office space with an initial term expiring in 2026. The Sublease includes an option to extend the agreement, at the Company’s discretion, if the Sublandlord declines to terminate its master lease. The Sublease includes a rent abatement period of three months and escalating rent payment provisions.

The operating lease agreements included in the measurement of lease liabilities do not reflect options to extend or terminate, as the Company does not consider the exercise of these options to be reasonably certain. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company recognizes operating lease expense on a straight-line basis over the lease term. Operating lease expense for the years ended December 31, 2022, 2021, and 2020 were $2.8 million, $1.8 million, and $1.8 million, respectively. Short-term lease expense for the year ended December 31, 2022 was $3.7 million.

As the rates implicit in the Company’s outstanding leases are not determinable, the Company uses its incremental borrowing rate based on information available on the lease commencement date to determine the present value of lease payments.

The weighted-average remaining lease term and weighted-average discount rate related to the Company’s operating leases at December 31, 2022 were as follows:


Weighted-average remaining lease term	6.2 years
Weighted-average discount rate	2.3	%

Future undiscounted lease payments, and a reconciliation of these payments to the Company’s operating lease liabilities at December 31, 2022, were as follows (in thousands):


Year ended December 31,
2023	$	3,458
2024	3,578
2025	3,703
2026	2,346
2027	2,320
Thereafter	5,098
Total lease payments	$	20,503
Less: Imputed interest	1,339
Total lease liabilities	$	19,164

Other Information

Cash payments included in the measurement of the operating lease liabilities were $2.5 million for the year ended December 31, 2022. Right of use assets obtained in exchange for operating lease liabilities were $4.7 million for the year ended December 31, 2022.