The Company leases office and research and development space under a non-cancelable operating lease in Marina del Rey, California, with the lease term running through December 31, 2031. Annual base rent is from $1.9 million and increases by 3% annually and will be $2.5 million by the end of the lease term. The Company also maintains an irrevocable letter of credit in connection with this lease, which had a balance of $0.2 million as of June 30, 2025 and which is reduced 20% annually through the end of the lease term.

On October 28, 2021, the Company entered into a lease for office and research and development space under a non-cancellable lease in Los Angeles, California (the “2021 Lease”). The 2021 Lease payment start date was May 1, 2022 and the total lease term is for 16 years and runs through 2038. Monthly rent for 2022 and 2023 was fully or partially abated while the lessor and the Company completed planned tenant improvements to the facility. The Company was responsible for construction costs over the tenant improvement allowance of $7.2 million. The construction was completed as of December 31, 2024, and the Company received the full allowance. Out-of-pocket expenses to be incurred by the Company are considered noncash lease payments, and included in the lease liability and right-of-use asset.

In connection with the execution of the 2021 Lease, the Company delivered an irrevocable standby letter of credit in the amount of $5.0 million to the landlord in 2022.

Future minimum annual lease payments under the Company’s noncancelable operating leases as of June 30, 2025 are as follows (in thousands):

Operating lease expenses were $2.0 million for each of the three months ended June 30, 2025 and 2024, and $4.0 million and $4.2 million for the six months ended June 30, 2025 and 2024, respectively. Variable costs related to operating expenses and taxes, which are recognized as incurred, were $0.5 million and $0.4 million for the three months ended June 30, 2025 and 2024, and $0.8 million and $1.0 million for the six months ended June 30, 2025 and 2024, respectively.

The following table summarizes supplemental cash flow information related to the Company’s operating leases for the six months ended June 30, 2025 and 2024 (in thousands):

The following table summarizes the weighted-average remaining lease term and weighted-average discount rate related to the Company’s operating leases as of June 30, 2025 and December 31, 2024:

From time to time, the Company may be involved in disputes, including litigation, relating to claims arising out of operations in the normal course of business. Any of these claims could subject the Company to costly legal expenses and, while management generally believes that there is adequate insurance to cover many different types of liabilities, the Company’s insurance carriers may deny coverage or policy limits may be inadequate to fully satisfy any damage awards or settlements. If this were to happen, the payment of any such awards could have a material adverse effect on the Company’s consolidated results of operations and financial position. Additionally, any such claims, whether or not successful, could damage the Company’s reputation and business. The Company is currently not a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on our consolidated results of operations or financial position.

Six Months Ended June 30,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases