Design Therapeutics, Inc. Leases Disclosure
7. Leases
In February 2021, the Company entered into a lease agreement with Crossing Holdings, LLC to rent office space (the “Lease”). Dr. Pratik Shah and entities that he controls are the sole members of Crossing Holdings, LLC. The lease commenced in September 2021 with a term of 72 months and an option to extend the lease term for a period of three years. Lease payments are subject to annual increases of 3% and the Company is responsible for its share of operating expenses and taxes, which are expensed as incurred. In March 2022, the Company entered into an amendment (the “Lease Amendment”) to its Lease with Crossing Holdings, LLC to rent additional office space in the same building. The Lease Amendment commenced in June 2022 and the term of the additional premises under the Lease Amendment coincides with the term of the Lease and ends in 2027. As of December 31, 2025, the weighed-average remaining lease term for the Company's leases was 1.7 years and the weighted-average discount rate used to determine the right-of-use asset and corresponding operating lease liability was 7.37%.
Maturities of operating lease liabilities, related party as of December 31, 2025 are as follows (in thousands):
2026 |
|
|
973 |
|
2027 |
|
|
663 |
|
Total future minimum lease payments |
|
|
1,636 |
|
Less: Present value adjustment |
|
|
(101 |
) |
Operating lease liabilities, related party |
|
$ |
1,535 |
|
Rent expense was $0.9 million for each of the years ended December 31, 2025 and 2024.
In January 2026, the Lease was further amended (the “Second Lease Amendment”). The Second Lease Amendment was approved by the Audit Committee of the Board in accordance with the Company’s Related Persons Transactions Policy and was effective upon the sale of the building on January 28, 2026. The Second Lease Amendment extends the lease term through December 2029 and reduces the base rent commencing on January 28, 2026, with an option to extend the lease term for a period of up to four years. The Company will pay approximately $3.4 million in future rent payments over the life of the Second Lease Amendment, which includes two months of rent abatement.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 9, 2026 | Showing above |
| 2024 | Mar 10, 2025 | |
| 2023 | Mar 19, 2024 | |
| 2022 | Mar 14, 2023 | |
| 2021 | Mar 10, 2022 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.