5. LEASES

The Company has entered into non-cancellable operating leases, including a sublease for an office facility serving as its corporate headquarters in Brisbane, California, that expires in 2029. The Company was the primary leaseholder of a facility in South San Francisco, California, that was later subleased to a third party and for which both the lease and the sublease ended concurrently in September 2025.

Components of net lease cost are as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Operating lease cost

 

$

2,261

 

 

$

2,728

 

 

$

2,577

 

Variable lease cost

 

 

(4

)

 

 

45

 

 

 

14

 

Total operating lease cost

 

$

2,257

 

 

$

2,773

 

 

$

2,591

 

Less: Sublease income

 

 

(1,496

)

 

 

(1,954

)

 

 

(1,928

)

Net lease cost

 

$

761

 

 

$

819

 

 

$

663

 

 

Other supplemental information related to operating leases is as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Cash paid for operating lease liabilities

 

$

2,141

 

 

$

3,116

 

 

$

3,000

 

Addition to right-of-use assets obtained from operating lease liabilities

 

 

 

 

 

2,487

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

2025

 

 

2024

 

Weighted-average discount rate for operating leases

 

 

 

 

12.5%

 

 

11.3%

 

Weighted-average remaining lease term

 

 

 

 

3.3 years

 

 

3.0 years

 

 

As of December 31, 2025, the maturities of operating lease liabilities are as follows (in thousands):

 

2026

 

$

830

 

2027

 

 

966

 

2028

 

 

995

 

2029

 

 

254

 

Total minimum lease payments

 

 

3,045

 

Less: Imputed interest

 

 

(577

)

Present value of operating lease liabilities

 

 

2,468

 

Less: Current portion of operating lease liabilities

 

 

(549

)

Non-current operating lease liabilities

 

$

1,919

 

 

As of December 31, 2025, the Company had not executed any leases that were yet to commence.

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.