Leases

9 Months Ended

Sep. 30, 2023

In April 2023, the Company entered into a lease agreement under a non-cancelable operating lease agreement with an unrelated party, expiring on May 31 2024. The lease provides for monthly lease payments of $12 thousand. The Company recognized a right-to-use asset of $0.2 million and lease liability of $0.2 million related to this lease agreement.

Operating lease cost, which is included in occupancy expense in the consolidated statements of operations, totaled $1.1 million and $1.1 million, respectively, of which $0.5 million and $0.5 million were related to variable lease payments, for the three months ended September 30, 2023 and 2022, respectively. Operating lease cost totaled $3.3 million and $3.2 million, of which $1.5 million and $1.5 million was related to variable lease payments, for the nine months ended September 30, 2023 and 2022, respectively. Cash paid for amounts included in the measurement of lease liabilities was $0.6 million and $1.8 million for three

and nine months ended September 30, 2023, respectively. Cash paid for amounts included in the measurement of lease liabilities totaled $0.6 million and $1.7 million for the three and nine months ended September 30, 2022, respectively.

In connection with its operating lease agreement for office facilities through September 2030, the Company executed a letter of credit. As of September 30, 2023 and December 31, 2022, there were no outstanding balances on the letter of credit.

Sublease income, which is included in other income in the consolidated statements of operations, totaled $0.1 million and $0.2 million for three and nine months ended September 30, 2023, respectively.

The components of lease costs are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease cost	$	1,101	$	1,084	$	3,299	$	3,209
Sublease income	(80)		—		(239)		—
Total lease cost	$	1,021	$	1,084	$	3,060	$	3,209

Future minimum lease payments as of September 30, 2023 are as follows (in thousands):


Year	Amount
Remainder of 2023	$	633
2024	2,470
2025	2,482
2026	2,557
2027	2,633
2028	2,712
Thereafter	4,937
Total lease payments	18,424
Less: imputed interest	(2,920)
Operating lease liability	$	15,504

The weighted average remaining lease term and discount rate as of September 30, 2023 are as follows:


Weighted average remaining lease term (in years)	7.0
Weighted average discount rate	5	%