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 June 30, 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 June 30, 2024 and December 31, 2023, and no such royalties were due.

The Company enters into contracts in the normal course of business with CROs for clinical trials, with CMOs for clinical supplies manufacturing and with other vendors for preclinical studies, supplies and other products and services for operating purposes. These agreements generally provide for termination at the request of either party generally with less than one-year notice. The Company did not expect any of these agreements to be terminated and did not have any non-cancellable obligations under these agreements as of June 30, 2024.

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 June 30, 2024 and December 31, 2023, the Company does not have any material indemnification claims that were probable or reasonably possible.

As of June 30, 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 and six months ended June 30, 2023.

Components of the lease expense for the three and six months ended June 30, 2024 and 2023, were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023

Operating lease cost	$	854	$	606	$	1,543	$	1,215
Finance lease cost:
Amortization of right-of-use assets		237		201		475		386
Interest on lease liabilities		38		47		82		90
Short-term lease cost		—		—		—		1
Variable lease cost		262		246		553		484
Total lease expense	$	1,391	$	1,100	$	2,653	$	2,176

Supplemental cash flow information related to leases was as follows for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	809	$	602	$	1,433	$	1,167
Operating cash flows from finance leases		40		47		82		90
Financing cash flows from finance leases		245		187		467		357
Right-of-use assets obtained in exchange for lease obligations upon inception of lease (noncash):
Operating leases		—		—		2,518		—
Finance leases		—		386		—		744

The following is a schedule by year of future payments of the Company’s lease liabilities as of June 30, 2024 (in thousands):


	Operating Leases			Finance Leases

2024 (remainder of the year)	$	1,620		$	548
2025		3,563			828
2026		4,046			147
2027		446			—
Total lease payments		9,675			1,523
Less interest		(1,086	)		(113	)
Total lease liability balance		8,589			1,410
Less: current portion		(2,867	)		(1,003	)
Non-current lease liabilities	$	5,722		$	407

The weighted-average remaining lease term and discount rate related to the Company’s operating lease liabilities as of June 30, 2024, were 2.6 years and 9%, respectively. The weighted-average remaining lease term and discount rate related to the Company’s finance lease liabilities as of June 30, 2024, were 1.5 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.