The Company leases approximately 35,823 square feet of office, laboratory, and manufacturing space in two buildings at our headquarters in San Diego, California, with the lease for all rented space expiring December 31, 2025. In December 2021, the Company executed a new lease for approximately 11,978 additional square feet square feet of office and laboratory space in San Diego, California that expires in January 2026. In January 2022, the Company executed a new lease for an additional 5,278 square feet of office and laboratory space in San Diego, California that expires in January 2026. In December 2022, the Company executed a new lease, subject to the consent of a third party that was obtained in February 2023, for an additional 18,005 square feet of office and laboratory space in San Diego, California that commences in April 2023 and expires in March 2024. Rent payments for the additional space are $49,000 each month through the end of the lease term.

In August 2020, through the acquisition of Lineagen, the Company obtained a lease for approximately 9,710 square feet of office space in a Salt Lake City, Utah under a non-cancelable operating lease that expires in December 2026.

In November 2022, through the acquisition of Purigen, the Company obtained a lease for approximately 16,165 square feet of office and laboratory space in Pleasanton, California, under a non-cancelable operating lease agreement that expires in July 2027.

In October 2021, through the acquisition of BioDiscovery, the Company obtained a finance lease of 4,786 square feet of office space in El Segundo, California that expires in February 2041. The portion of the future payments designated as principal repayment and related interest was classified as a finance lease obligation on our consolidated balance sheets. Refer to Note 15. Related Party Transactions for additional information.

For all leases, the Company has the ability to enter into renewal negotiations, prior to the lease end date, with no specific terms. At this time, it is not reasonably certain that we will extend the term of the lease and therefore the renewal period has been excluded from the aforementioned ROU asset and lease liability measurements. The leases are subject to variable charges for common area maintenance and other costs that are determined based on actual costs and includes certain lease incentives such as tenant improvement allowances. The base rent for the leases is subject to an annual increase each year. Rent expense is being recognized on a straight-line basis over the term of the lease. The Company’s estimated incremental borrowing rate summarized in the table below was used in its present value calculations as the operating and finance leases do not have a stated rate and the implicit rate was not readily determinable. In determining the incremental borrowing rate, the Company considered the interest rate of the Term Loans as well as publicly available data for discount rates used by peer companies.


	Year Ended December 31,
	2022			2021
Cash payments included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,622,000		$	447,000
Operating cash flows from finance leases	$	278,000		$	47,000
Financing cash flows from finance leases	$	36,000		$	5,000
Weighted-average remaining lease term:
Operating leases	3.41 years			4.10 years
Finance leases	18.17 years			19.20 years
Weighted-average discount rate:
Operating leases	8.3		%	7.1		%
Finance leases	7.1		%	7.1		%
Noncash lease liabilities resulting from obtaining right-of-use assets
Operating leases	$	517,000		$	4,751,000


	Year Ended December 31,
	2022		2021
Operating leases
Operating lease costs	$	2,084,000	$	1,118,000
Variable lease costs	940,000		386,000
Total rent expense	3,024,000		1,504,000
Finance lease
Amortization of right of use assets	219,000		19,000
Interest on lease liabilities	278,000		47,000
Variable lease costs	32,000		—
Total finance lease costs	529,000		66,000

Gross sublease income	(106,000)		(18,000)
Total lease costs	$	3,447,000	$	1,552,000


	Operating Leases		Finance Lease
2023	$	2,586,000	$	322,000
2024	2,684,000		330,000
2025	2,788,000		338,000
2026	729,000		347,000
2027	255,000		356,000
Thereafter	—		5,594,000
Total future lease payments	9,042,000		7,287,000
Less: imputed interest	(1,278,000)		(3,383,000)
Total lease liabilities	7,764,000		3,904,000
Less: lease liability, current portion	2,260,000		285,000
Lease liability, net of current portion	$	5,504,000	$	3,619,000

The Company has a contractual commitment with a supplier to purchase $0.3 million of products every month for an initial term of two years beginning in May 2021 until May 2023. $3.2 million and $1.9 million of materials were purchased under this minimum purchase commitment during the years ended December 31, 2022 and 2021, respectively. The contract can be terminated with 90 days written notice by either party.

From time to time, the Company may be subject to potential liabilities under various claims and legal actions that are pending or may be asserted. These matters arise in the ordinary course and conduct of the business. The Company regularly assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in the financial statements. An estimated loss contingency is accrued in the financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on the Company’s assessment, it currently does not have any material loss exposure as it is not a defendant in any claims or legal actions.