Septerna, Inc. Leases Disclosure
Operating Leases
The Company leases office and research and development space at the Company’s headquarters in South San Francisco, California under an operating lease. In April 2021, the Company entered into a lease for 12,560 square feet, set to expire in February 2023. In September 2022, the lease was amended to add 9,348 square feet, totaling 21,908 square feet (the “Original Leased Space”), also expiring in February 2023. In December 2022, the Company entered into another lease amendment to extend the term of the Original Leased Space and added 22,911 square feet (the “Additional Leased Space”). The Company took control of the Additional Leased Space in November 2023, at which point the Company vacated the Original Leased Space to allow the landlord to renovate it.
Renovation of the Original Leased Space was completed in July 2024. Upon completion of the renovation of the Original Leased Space, the lease of the Original Leased Space commenced, resulting in the total leased premises increasing to 44,819 square feet (the “Leased Space”).
The lease term for the Leased Space expires in July 2032, with an option to extend the lease for eight additional years (the “Extension Option”). As of December 31, 2025 and 2024, it was not probable that the Company would exercise the Extension Option, therefore, it was excluded from the right-of-use asset and lease liability calculations.
During the year ended December 31, 2024, the Company recorded a $12.5 million operating lease right-of-use asset and operating lease liability upon completion of the renovations of the 21,908 square foot office and research and development space (the "Original Leased Space") as the Company occupied the property. These amounts are disclosed in the supplemental information of noncash activities on the statements of cash flows.
The Company is required to pay base rent plus its proportionate share of operating expenses, as defined in the applicable lease agreement on all of its leases. Variable lease payments related to operating expenses including utilities, maintenance costs and real estate taxes were $1.1 million and $0.7 million for the years ended December 31, 2025 and 2024, respectively.
Operating lease expenses, excluding variable lease payments, were $4.7 million and $3.5 million for the years ended December 31, 2025 and 2024, respectively. Short-term lease expense was not material for the periods presented. As of December 31, 2025 and 2024, the weighted average remaining lease term of the Leased Space was 6.6 and 7.6 years, respectively. The weighted average incremental borrowing rate used for the calculation of the present value of lease payments over the lease term was 11.34% for both the years ended December 31, 2025 and 2024.
The following table summarizes the expenses recognized and cash paid for the Leased Space (in thousands):
|
|
Years Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Cash paid for operating lease liabilities |
|
$ |
4,469 |
|
|
$ |
1,631 |
|
Operating lease costs |
|
|
4,721 |
|
|
|
3,462 |
|
Short-term lease costs |
|
|
1,035 |
|
|
|
644 |
|
As of December 31, 2025, future minimum rental payments for operating leases were as follows (in thousands):
As of December 31, |
|
Future |
|
|
2026 |
|
$ |
4,612 |
|
2027 |
|
|
4,760 |
|
2028 |
|
|
4,912 |
|
2029 |
|
|
5,070 |
|
2030 |
|
|
5,234 |
|
Thereafter |
|
|
8,616 |
|
Total lease payments |
|
|
33,204 |
|
Less: imputed interest |
|
|
(9,579 |
) |
Total present value of operating lease liabilities |
|
$ |
23,625 |
|
Operating lease liabilities, current |
|
$ |
2,212 |
|
Operating lease liabilities, non-current |
|
|
21,413 |
|
Total operating lease liabilities |
|
$ |
23,625 |
|
As of December 31, 2025 and 2024, the Company did not have any finance leases.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 9, 2026 | Showing above |
| 2024 | Mar 27, 2025 | |
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.