Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingences

Commitments and Contingencies

Leases

The Company is the lessee in all of its lease arrangements. The Company did not enter into any leases with related parties during the presented periods. The Company makes assumptions and judgments when assessing contracts for lease components, determining lease classifications, and calculating right-of-use asset and lease liability values. These assumptions and judgments may include the useful lives and fair values of the leased assets, the implicit rate underlying the Company’s leases, the Company’s incremental borrowing rate or the Company’s intent to exercise or not exercise options available in lease contracts.

The following table shows right-of-use assets and lease liabilities, and the associated financial statement line items as of December 31, 2023 and 2022 (in thousands):

		December 31,
Lease-Related Assets and Liabilities	Financial Statement Line Items	2023		2022
Right-of-use assets:
Operating leases	Other assets	$	1,180	$	1,707
Finance leases	Property and equipment, net	1,008		1,317
Total right-of-use assets		$	2,188	$	3,024
Lease liabilities:
Operating leases	Accrued and other current liabilities	$	578	$	519
	Operating lease obligation, net of current portion	644		1,222
Finance leases	Finance lease obligation, current portion	440		464
	Finance lease obligation, net of current portion	196		626
Total lease liabilities		$	1,858	$	2,831

Lease costs and other information consisted of the following (in thousands, except terms and rates):

	Year Ended December 31,
	2023		2022
Lease cost
Finance lease cost:
Amortization of right-of-use assets	$	312	$	280
Interest on lease liabilities	55		61
Operating lease cost	636		504
Total lease cost	$	1,003	$	845
Other information
Finance leases:
Operating cash outflows	$	55	$	48
Financing cash outflows	$	466	$	303
Right-of-use assets obtained in exchange for lease liabilities	$	18	$	1,253
Weighted-average remaining lease term (in years)	1.4		2.3
Weighted-average discount rate	6.5%		6.4%
Operating leases:
Operating cash outflows	$	628	$	609
Right-of-use assets obtained in exchange for lease liabilities	$	—	$	2,169
Weighted-average remaining lease term (in years)	2.0		3.0
Weighted-average discount rate	7.5%		7.5%

Future minimum lease payments for the Company’s leases as of December 31, 2023 were as follows (in thousands):

	Operating Leases		Finance Leases		Total
2024	$	646	$	467	$	1,113
2025	666		197		863
2026	—		2		2
2027 and thereafter	—		—		—
Total minimum lease payments	1,312		666		1,978
Less: imputed interest	(90)		(30)		(120)
Present value of future lease payments	1,222		636		1,858
Less: current portion	578		440		1,018
Long-term portion	$	644	$	196	$	840

Operating Leases

The Company leases a total of approximately 24,300 square feet of office and laboratory space under a single non-cancelable operating lease with a termination date of December 31, 2025 (as amended, the “Office Lease”). The Office Lease includes an early termination right which termination would occur under certain circumstances, as provided in the amended Office Lease, after July 1, 2024 if exercised. The Company is not currently reasonably certain it will exercise the termination right. The implicit rate provided in the Company’s operating lease is not readily determinable. As such, the Company uses its incremental borrowing rate to calculate the present value of its operating lease liabilities.

Finance Leases

The Company leases certain equipment related to its information technology infrastructure and laboratory operations. All of the Company’s current finance leases include bargain purchase options that the Company is reasonably certain to exercise. The Company has elected not to separate lease and non-lease components for its equipment leases. The rates implicit in the Company’s finance leases are determinable, and the Company uses those rates to calculate the present value of its finance lease liabilities.

Indemnification

The Company has agreed to indemnify its officers and directors for certain events or occurrences, while the officer or director is or was serving at the Company’s request in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company purchases director and officer insurance coverage that provides for corporate reimbursements of covered obligations that limits the Company’s exposure and enables it to recover a portion of potential future amounts paid. The Company is unable to reasonably estimate the maximum amount that could be payable under these arrangements since these obligations are not capped but are conditional to the unique facts and circumstances involved. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2023 and 2022. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements.

Employee Agreements

The Company has signed various employment agreements with key executives pursuant to which if their employment is terminated by the Company without cause or by the employees for good reason, or following a change of control of the Company, the employees are entitled to receive certain benefits, including severance payments, accelerated vesting of stock and stock options, and certain insurance benefits.

Legal Matters

The Company is not currently a party to any material litigation or other material legal proceedings. The Company may, from time to time, be involved in various legal proceedings arising from the normal course of business activities, and an unfavorable resolution of any of these matters could materially affect the Company’s future results of operations, cash flows, or financial position.