The Company entered into license agreements with the NIH, Intellia and Kite (see Note 6), pursuant to which the Company is required to pay certain milestone payments contingent upon the achievement of specific development and regulatory events. No such milestones were achieved or probable as of March 31, 2024 and December 31, 2023. The Company is required to pay royalties on sales of products developed under these agreements. The Company’s product candidates were in clinical trials or the pre-clinical stage of development as of March 31, 2024 and December 31, 2023, and no such royalties were due.

From time to time, the Company may become involved in legal proceedings arising from the ordinary course of business. The Company records a liability for such matters when it is probable that future losses will be incurred and that such losses can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. Management is not aware of any legal matters that could have a material adverse effect on the Company’s financial position, results of operations or cash flows.

In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made

against the Company in the future. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of March 31, 2024 and December 31, 2023, the Company does not have any material indemnification claims that were probable or reasonably possible.

As of March 31, 2024, the Company leased 68,153 square feet of office and laboratory space in Emeryville, California under operating leases which have terms through February 2027.

The Company has multiple leases for laboratory equipment with terms of 36 months that are accounted for as finance leases. Some of the Company’s office and lab space were leased under short-term lease agreements during the three months ended March 31, 2023.

Components of the lease expense for the three months ended March 31, 2024 and 2023, were as follows (in thousands):


	Three Months Ended March 31,
	2024		2023

Operating lease cost	$	689	$	609
Finance lease cost:
Amortization of right-of-use assets		237		185
Interest on lease liabilities		44		44
Short-term lease cost		—		1
Variable lease cost		291		237
Total lease expense	$	1,261	$	1,076

Supplemental cash flow information related to leases was as follows for the three months ended March 31, 2024 and 2023 (in thousands):


	Three Months Ended March 31,
	2024		2023

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	624	$	565
Operating cash flows from finance leases		44		44
Financing cash flows from finance leases		231		168
Right-of-use assets obtained in exchange for lease obligations upon inception of lease (noncash):
Operating leases		2,518		—
Finance leases		—		357

The following is a schedule by year of future payments of the Company’s lease liabilities as of March 31, 2024 (in thousands):


	Operating Leases			Finance Leases

2024 (remainder of the year)	$	2,484		$	823
2025		3,563			828
2026		4,046			147
2027		446			—
Total lease payments		10,539			1,798
Less interest		(1,339	)		(152	)
Total lease liability balance		9,200			1,646
Less: current portion		(2,739	)		(979	)
Non-current lease liabilities	$	6,461		$	667

The weighted-average remaining lease term and discount rate related to the Company’s operating lease liabilities as of March 31, 2024, were 2.9 years and 9%, respectively. The weighted-average remaining lease term and discount rate related to the Company’s finance lease liabilities as of March 31, 2024, were 1.8 years and 11%, respectively. The weighted-average remaining lease term and discount rate related to the Company’s operating lease liabilities as of December 31, 2023, were 3.1 years and 8%, respectively. The weighted-average remaining lease term and discount rate related to the Company’s finance lease liabilities as of December 31, 2023, were 2.0 years and 11%, respectively. The discount rates were based on the Company’s estimate of its incremental borrowing rate, as the discount rates implicit in the leases could not be readily determined. As the Company does not have any outstanding debt, the Company estimated the incremental borrowing rate based on its estimated credit rating and available market information.