Leases

6 Months Ended

Jun. 30, 2023

Redwood City, California

The Company has a lease for facilities in Redwood City, California (“Redwood City Premises”). Related to this lease, the Company provided the landlord with a letter of credit in the amount of $2.5 million, which is classified as restricted cash under long term assets on the Company’s condensed consolidated balance sheets.

In March 2023, the Company entered into an amendment to accelerate the expiration of one of its Redwood City Premises under the existing lease from December 31, 2031 to September 30, 2023. Concurrently, the Company entered into an agreement for additional tenant improvement allowance towards its other Redwood City premises. As a result of the modification the Company revalued the lease liability based on the new and remaining lease terms, which resulted in a reduction to the lease liability of $8.3 million, and recognized the remeasurement to the lease liabilities as an adjustment to the right-of-use asset. The estimated value of non-cash consideration, composed primarily of leasehold improvements and furniture and fixtures, was $14.9 million.

Durham, North Carolina

The Company has an operating lease agreement for a building in Durham, North Carolina (“NC Premises”). The lease commenced in April 2021 when the Company obtained control of the NC Premises, and the lease term expires in October 2037 with two options to extend the lease term for a period of five years each. In April 2023, the Company entered into an amendment to reduce the rent payments for the NC Premises, effective as of May 1, 2023.

On October 26, 2021, the Company entered into a sublease agreement with a subtenant for the NC Premises through October 2037, the remainder of the lease term. In line with the amendment to the NC Premises’ lease, sublease rent payments were correspondingly reduced. Sublease income for operating leases is recognized on a cash basis over the lease term based on assessment of probability of collection. Sublease income was $1.4 million and $2.8 million for the three and six months ended June 30, 2023, respectively, and $1.7 million and $3.4 million for the three and six months ended June 30, 2022, respectively. The sublease income is classified as a reduction of rent expense in operating expenses.

As of June 30, 2023, undiscounted future non-cancellable lease payments under the lease agreements are as follows (in thousands):


Year ending December 31,	Operating Leases		Sublease Payments Receivable
2023 (remaining six months)	$	20,915	$	2,573
2024	11,086		5,248
2025	11,448		5,405
2026	11,821		5,567
2027	12,207		5,735
Thereafter	94,653		66,416
Total undiscounted lease payments	$	162,130	$	90,944
Less: Present value adjustments	$	(70,978)
Total lease liability	$	91,152