In February 2018, as amended in March 2018, the Company entered into a non-cancelable operating lease for a facility in San Diego, California ("2018 Lease"). The 2018 Lease has an initial term of seven years which expires in August 2025, and the Company has an option to extend the term of the 2018 Lease for an additional five years, a termination option subject to early termination fees and an option to sublease the facility. The 2018 Lease is subject to base lease payments and additional charges for common area maintenance and other costs and includes certain lease incentives and tenant improvement allowances. The Company’s estimated incremental fully

collateralized borrowing rate of 8.0% was used in its present value calculation as the 2018 Lease does not have a stated rate and the implicit rate was not readily determinable.

On September 9, 2022, the Company entered into a lease agreement for laboratory and office space in San Diego, California ("2022 Lease"). The Company expects to move its corporate headquarters to this new facility upon the substantial completion of improvements and written landlord consent, which is expected to occur in the second half of 2023.

Under the terms of the 2022 Lease, expected future monthly minimum lease payments of $0.5 million, with six months of rent abatement in the first year, start on the earlier of (i) the date which is ten (10) months after substantial completion of demolition work, or (ii) the date of the substantial completion of improvements and first occupancy for business purposes, and the term expires on the date immediately preceding the one hundred thirty-seventh (137th) monthly anniversary of this lease payment start date. Lease payments are subject to annual 3% increases. The Company is also responsible for certain operating expenses and taxes during the term of the 2022 Lease. The 2022 Lease provides the Company with specified tenant improvement and landlord work allowances. The Company has (i) two options to extend the term of the 2022 Lease for an additional period of five (5) years each, and (ii) a right of first offer on adjacent space to the new facility, subject to the terms and conditions of the 2022 Lease.

The 2022 Lease did not commence as of September 30, 2022 since the Company did not control the facility. The lease will be measured and recognized upon lease commencement.

Under the terms of the 2018 Lease and 2022 Lease, the Company provided the lessors with irrevocable letters of credit in the amounts of $0.5 million and $0.8 million, respectively. The lessors are entitled to draw on the letters of credit in the event of any default by the Company under the terms of the leases.

As of September 30, 2022, future minimum payments under non-cancellable operating leases, excluding the 2022 Lease, were as follows (in thousands):


Year ending December 31,	Minimum Payments
2022 (3 months)	$	308
2023		1,244
2024		1,280
2025		871
Total future minimum lease payments		3,703
Less imputed interest		(381	)
Total operating lease liability		3,322
Less operating lease liability, current		(1,022	)
Operating lease liability, non-current	$	2,300

Lease cost is recorded on a straight-line basis over the term of the Company’s facility lease. Rent expense was $0.3 million and $0.9 million for the three and nine months ended September 30, 2022, respectively, and $0.3 million and $0.9 million for the three and nine months ended September 30, 2021, respectively. As of September 30, 2022 and December 31, 2021, the Company’s 2018 Lease weighted average remaining term was 2.8 and 3.6 years, respectively.

Cash paid for amounts included in the measurement of lease liabilities for operating cash flow from operating leases was $0.3 million and $0.9 million for each of the three and nine months ended September 30, 2022 and 2021, respectively.