The Company may be subject to litigation, claims and disputes in the ordinary course of business. There is an inherent risk in any litigation or dispute and no assurance can be given as to the outcome of any claims.

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend the indemnified parties for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. To date, the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. From time to time, the Company has entered into indemnification agreements with its directors and officers that requires it to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by law. The Company also has directors’ and officers’ insurance.

The Company leases certain of its facilities under non-cancellable operating leases expiring at various dates through 2044. The Company is also responsible for utilities, maintenance, insurance, and property taxes under these leases. Our lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms, as

well as payments for common-area-maintenance and administrative services. We often receive customary incentives from our landlords, such as reimbursements for tenant improvements and rent abatement periods, which effectively reduce the total lease payments owed for these leases. Leases are classified as operating or financing at commencement. We do not have any material financing leases.

Certain leases include options to renew or terminate at the Company’s discretion. The lease terms include periods covered by these options if it is reasonably certain the Company will renew or not terminate. The Company’s lease agreements do not contain any material residual value guarantees or restrictive covenants.


(in thousands)	September 30, 2022
Assets:
Operating lease right-of-use-assets	$	74,948
Current liabilities:
Current portion of operating lease liabilities	$	13,642
Noncurrent liabilities:
Operating lease liabilities, net of current portion	$	81,270


(in thousands)	Operating leases
Years ending September 30 :
2023	$	14,734
2024	14,153
2025	14,005
2026	12,550
2027	7,205
Thereafter	90,072
Total minimum lease payments	$	152,719

Less: imputed interest	(57,807)
Total operating lease liabilities	$	94,912
Less: current portion	(13,642)
Operating lease liabilities, net of current portion	$	81,270

The statement of cash flows for the year ended September 30, 2022, include changes in right-of-use assets and operating lease liabilities of $13.4 million and $33.5 million, respectively. For the year ended September 30, 2021, changes in right-of-use assets and operating lease liabilities were $27.9 million and $30.1 million, respectively.

Operating lease expense was $15.6 million and $9.5 million for the years ended September 30, 2022 and 2021 respectively. Cash payments for amounts included in the measurement of operating lease liabilities for the year ended September 30, 2022 were $13.0 million. During the year end September 30, 2022 the Company received $17.6 million of lease incentive payments, which is an allowance for improvements made by the Company to the Wilsonville facility. As of September 30, 2022, the weighted-average remaining lease term was 15.98 years and the weighted-average incremental borrowing rate was 6.39%.

On July 28, 2021, the Company entered into a 7-year operating lease for approximately 21,000 square-feet of office space located in South San Francisco, California, to further expand the Company operations. Upon execution of the lease agreement, the Company provided the landlord an approximately $0.2 million security deposit. The Company will pay an initial annual base rent of approximately $1.7 million, which is subject to scheduled 3% annual increases, plus certain operating expenses. The Company has the right to sublease the facility, subject to landlord consent. The lease commenced on October 1, 2022. As of lease commencement, the total future minimum lease payments under the agreement are $13.1 million.

The Company has two options to extend the term for five years. The Company does not have reasonable certainty that these options will be exercised. Upon execution of the lease agreement, an approximate $0.6 million irrevocable letter of credit was provided as a security deposit. The Company will pay an initial annual base rent of approximately $1.2 million, which is subject to scheduled 2% annual increases, plus certain operating expenses. The Company has the right to sublease the facility, subject to landlord consent. The lease commenced on March 3, 2022. As of lease commencement date, the total future minimum lease payments under the agreement were $13.2 million.

Other than the above leases, during 2022, the Company entered into immaterial operating lease agreements with total minimum lease payments under these agreements of less than $2.0 million and with lease terms ranging from 2.0 to 4.0 years.