Leases

9 Months Ended

Sep. 30, 2023

LEASES

All of our leases are operating leases and each contain customary rent escalation clauses. Certain of the leases have both lease and non-lease components. We have elected to account for each separate lease component and the non-lease components associated with that lease component as a single lease component for all classes of underlying assets.

The following table provides additional details of our facility leases presented in our condensed balance sheets (dollars in thousands):


Facilities	September 30, 2023			December 31, 2022
Right-of-use assets	$	6,523		$	9,295

Current portion of lease liabilities	4,321			3,894
Operating lease liability, net of current portion	2,887			5,855
Total	$	7,208		$	9,749

Weighted-average remaining life (years)	1.8			2.4
Weighted-average discount rate	6.8		%	6.8		%

The lease costs, which are included in operating expenses in our condensed statements of operations and comprehensive income (loss), were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease expense	$	1,061	$	1,064	$	3,127	$	3,192
Cash paid for operating lease	$	1,119	$	1,072	$	3,316	$	3,194

The following table summarizes our undiscounted cash payment obligations for our operating lease liabilities as of September 30, 2023 (in thousands):


Remainder of 2023	$	1,165
2024	4,715
2025	1,450
2026	329

Thereafter	—
Total undiscounted operating lease payments	7,659
Imputed interest expenses	(451)
Total operating lease liabilities	7,208
Less: Current portion of operating lease liability	(4,321)
Operating lease liability, net of current portion	$	2,887

In March 2023, we entered into a sub-lease Agreement (Sub-lease) with Chronus Health, Inc. (Chronus). The Sub-lease permits use by Chronus of a portion of the space in our facility in Fremont, California. We lease the facility from a different counterparty under a separate head lease that commenced in September 2008 and has been amended multiple times to add space and to extend the lease term through March 2025. We have sub-leased to Chronus approximately 21,644 square feet of the 72,500 square foot building's interior space, plus corresponding exterior support space and parking. The term of the Sub-lease expires on February 1, 2025.

In accordance with the Sub-lease, we recognized an impairment of long-lived assets totaling $0.4 million during the three months ended March 31, 2023, which consisted primarily of impairment to the Fremont facility right-of-use asset. The Sub-lease commenced in April 2023 and we recognized $0.2 million and $0.5 million of income from the Sub-lease during the three and nine months ended September 30, 2023, respectively.

In August 2023, we entered into an amendment to the lease agreement (the Waltham lease) for our Waltham, Massachusetts facility to expand the leased premises to include an additional 4,247 square feet of office space. We recorded an additional $0.3 million right-of-use asset and lease liability for the Waltham lease upon commencement of the lease.