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

As of September 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 nine months ended September 30, 2023.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

Operating lease cost	$	854	$	602	$	2,398	$	1,821
Finance lease cost:
Amortization of right-of-use assets		237		216		712		607
Interest on lease liabilities		33		49		115		140
Short-term lease cost		—		—		—		1
Variable lease cost		262		246		814		730
Total lease expense	$	1,386	$	1,113	$	4,039	$	3,299

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	811	$	602	$	2,245	$	1,769
Operating cash flows from finance leases		33		49		115		140
Financing cash flows from finance leases		241		206		709		562
Right-of-use assets obtained in exchange for lease obligations upon inception of lease (noncash):
Operating leases		—		—		2,518		—
Finance leases		—		110		—		854

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


	Operating Leases			Finance Leases

2024 (remainder of the year)	$	816		$	274
2025		3,563			887
2026		4,046			179
2027		446			—
Total lease payments		8,871			1,340
Less interest		(903	)		(172	)
Total lease liability balance		7,968			1,168
Less: current portion		(3,000	)		(931	)
Non-current lease liabilities	$	4,968		$	237

The weighted-average remaining lease term and discount rate related to the Company’s operating lease liabilities as of September 30, 2024, were 2.4 years and 9%, respectively. The weighted-average remaining lease term and discount rate related to the Company’s finance lease liabilities as of September 30, 2024, were 1.3 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.