The Company has operating leases for its corporate office, laboratory and vivarium space in Redwood City, California. On August 7, 2020, the Company executed a non-cancellable lease agreement for 71,646 square feet of space (the “Chesapeake Master Lease”), for its corporate office, laboratory and vivarium space in Redwood City, California. The Chesapeake Master Lease has an initial term of ten years from the commencement date, with an option to extend the lease for an additional eight-year term. The Chesapeake Master Lease contains rent escalation, and the Company is also responsible for certain operating expenses and taxes throughout the lease term.

The Company subleases portions of its leased facilities under arrangements associated with its Chesapeake Master Lease of over 30,000 square feet of its facilities. Sublease rental income is recorded as a reduction of general and administrative expenses, as the amounts represent recoveries of operating costs rather than revenues from the Company’s primary business activities. Under these arrangements, rent is subject to scheduled increases, and the subtenants are responsible for certain operating expenses and taxes. In June 2026, a sublessee notified the Company that it was exercising its contractual right to terminate the sublease by providing the required 15 months' notice prior to the contractual expiration date.

In June 2026, the Company concluded that the sublessee termination notification indicated that the carrying amount of the Company's right-of-use asset may not be recoverable and constituted a triggering event under ASC 360 for this asset group. In performing the impairment assessment, the Company utilized the income approach using a discounted cash flow methodology to estimate fair values of its right-of-use assets.

The carrying value of the asset grouping was compared to its estimated fair value. The analysis measured the undiscounted cash flows over the remaining lease term, by utilizing key market based assumptions such as rent, lease terms, lease up costs, and a discount rate. It also considered current market lease rates and applied a discount rate of 8.0%. These represented Level 3 nonrecurring fair value measurements. Based on these analyses, the Company recognized pre-tax long-lived asset impairment charges of $0.8 million on the right-of-use assets, disclosed in Impairment charges on the condensed consolidated income statement, for the three and six months ended June 30, 2026. The Company remains the primary obligor under the head leases

Sublease income from the sublease agreements were approximately $0.4 million and $0.8 million for the three and six months ended June 30, 2026, respectively, and $0.4 million and $0.6 million during the same periods in 2025,respectively.

The weighted-average remaining lease term and discount rate related to the Company’s lease liabilities as of June 30, 2026 were 4.9 years and 11.9%, respectively, for the operating leases. The weighted-average remaining lease term and discount rate related to the Company’s lease liabilities as of December 31, 2025 were 5.4 years and 11.9%, respectively, for the operating leases. The Company lease discount rates are based on estimates of its incremental borrowing rate, as the discount rates implicit in the Company’s leases cannot be readily determined. As the Company does not have any outstanding debt, the Company estimates the incremental borrowing rate based on its estimated credit rating and available market information.

Cash required as security for our operating leases is secured by a letter of credit on behalf of the lessor in the amount of approximately $1.5 million and is recorded as restricted cash on the balance sheet as of June 30, 2026 and December 31, 2025.

The components of lease expense were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Total operating lease cost	$	903	$	987	$	1,848	$	2,064

Supplemental cash flow information related to leases was as follows (in thousands):


	Six Months Ended June 30,
	2026		2025
Operating cash outflows from operating leases	$	2,662	$	2,493

The following is a schedule by year for future maturities of the Company’s operating lease liabilities and sublease income to be received as of June 30, 2026 (in thousands):


	Operating Leases			Sublease Income
Remainder of 2026	$	2,736		$	885
2027		5,584			870
2028		5,775			—
2029		5,974			—
2030		6,179			—
Thereafter		2,611			—
Total lease payments		28,859			1,755
Less interest		(7,235	)		—
Total	$	21,624		$	1,755

In May 2015, the Company entered into a license agreement (as amended, the “Stanford Agreement”), with The Board of Trustees of the Leland Stanford Junior University (“Stanford”). The Stanford Agreement provides the Company exclusive licenses to certain inventions. As consideration, the Company issued Stanford shares of its common stock and a limited right to purchase equity in future financing. Additionally, the Company is required by the Stanford Agreement to make milestone payments up to an aggregate of $0.4 million for the first licensed product that meets certain patent issuance, clinical and regulatory milestones, and an additional milestone payment of $0.2 million for each additional regulatory approval. The Company also agreed in the Stanford Agreement to pay Stanford tiered royalties on the Company’s and its sublicensees’ net sales of licensed products, if any, at low single-digit percentage rates, subject to certain reductions. No royalty payments have been made to date.

In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of June 30, 2026, the Company did not have any material indemnification claims that were probable or reasonably possible and, consequently, had not recorded related liabilities.

The Company enters into agreements in the normal course of business, including with contract research organizations for clinical trials, contract manufacturing organizations for certain manufacturing services, and vendors for preclinical studies and other services and products for operating purposes, which are generally cancelable upon written notice.

From time to time, we might be subject to various legal proceedings relating to claims arising out of our operations. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against us in a reporting period for amounts above management’s expectations, our business, results of operations, financial position and cash flows for that reporting period could be materially adversely affected. We are not currently involved in any material legal proceedings, the ultimate disposition of which could have a material adverse effect on our operations, financial condition or cash flows.