On September 28, 2023, the Company entered into a lease agreement with HCP BTC, LLC, a Delaware limited liability company (“the Landlord”) for premises consisting of approximately 100,904 square feet of office and laboratory space located at Oyster Point Blvd, South San Francisco, California (the “Oyster Point Lease”), which is being used as a single unified Company headquarters. The lease term of approximately seven years started in the second quarter of 2024 when the Landlord substantially completed tenant improvements and may be extended for a period of eight years at the then prevailing market rates for a comparable property. Future lease payments are approximately $37.3 million which represent the non-cancellable periods of the lease. We excluded extension options that are not reasonably certain to be exercised from our lease terms. Our lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease term. Our lease agreement provides us the right to sublet the premises, subject to approval by the Landlord. Additionally, the Company provided a letter of credit to the Landlord in the amount of $1.4 million in connection with the Oyster Point Lease, which is classified as restricted cash as of March 31, 2026.

Though the Oyster Point Lease is accounted for as a single contract, the office space was occupied in March 2024 while the laboratory space was occupied in June 2024. Accordingly, the Company measured and allocated consideration to each lease component. Upon commencement of each lease component the Company recognized an aggregate right-of-use asset ("ROU") and lease liability of $23.7 million and $6.1 million during the quarters ended March 31, 2024 and June 30, 2024, respectively.


	Operating Lease
2026 (remainder of the year)	3,084
2027	5,897
2028	7,467
2029 and thereafter	20,821
Total undiscounted lease payments	$	37,269
Less: Present value discount	(8,485)
Total discounted lease payments	$	28,784
Total current operating lease liabilities	$	1,713
Total non-current operating lease liabilities	$	27,071
Total lease liability	$	28,784

Variable lease costs comprise primarily of the Company's proportionate share of operating expenses, property taxes, and insurance. Short-term lease expense and variable lease payments recorded in operating expenses were immaterial for the three months ended March 31, 2026 and 2025. Lease expenses for each of the three months ended March 31, 2026 and 2025 are as follows (in thousands):