Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

9.LEASES

As a lessee, the Company leases approximately 51,000 square feet of office and laboratory space in Redwood City, California with a lease term that is set to end in September 2032. The Company has an option to renew all leased space for an additional five-year term at then-current market rates. In connection with the lease, the Company maintains a letter of credit issued to the lessor in the amount of $0.5 million as of each of December 31, 2023 and 2022, which is secured by restricted cash and is presented as noncurrent at each date based on the term of the

underlying lease. In addition, the Company leases approximately 6,000 square of office space in San Diego, California under a lease that runs through September 2024.

The components of lease expense and supplemental information were as follows (dollars in thousands):

	Year Ended December 31,
	2023			2022
Operating lease cost	$	4,153		$	3,690
Variable lease costs		397			599
Short-term lease costs		22			263
Total lease costs	$	4,572		$	4,552
Weighted-average remaining lease term (in years)		8.7			9.8
Weighted-average incremental borrowing rate		6.2	%		6.2	%

Variable lease costs primarily consist of common area maintenance.

Supplemental cash flow information related to leases are as follows (in thousands):

	Year Ended December 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities	$	3,941	$	2,200
Lease liability obtained in exchange for right-of-use assets	$	514	$	6,855

As of December 31, 2023, future minimum commitments under the Company’s non-cancelable facility operating leases are as follows:

Years ending December 31,	(in thousands)
2024	$	3,969
2025		3,846
2026		3,957
2027		4,072
2028		4,191
Thereafter		16,874
Total undiscounted future minumum lease payments		36,909
Present value adjustment for minimum lease commitments		(8,650	)
Total operating lease liabilities	$	28,259

As a lessor, the Company has contracts for equipment leased to customers. The Company accounts for the non-lease component under the revenue recognition ASC 606 guidance and the lease component under ASC 842 guidance.

For an arrangement that has been classified as a sales-type lease, revenue is recognized when the transfer of control of the underlying leased asset has occurred and the net investment lease recorded, which is calculated at the present value of the remaining lease payments due from the lessee. For an arrangement that has been classified as an operating lease, revenue is recognized on a straight-line basis over the lease term.