Note 5—Leases:

In December 2011, the Company entered into a non-cancelable operating lease for office space in Los Angeles, California, with an initial term of seven years commencing on December 10, 2011. The lease was subsequently amended in November 2012, December 2013, March 2014, July 2015 and December 2017.

In July 2025, the Company executed an additional lease amendment to surrender certain suites effective March 31, 2026, and extend the lease term for the remaining 26,700 rentable square feet through August 31, 2031, an extension of five years and five months. Under the amended lease, base rent escalates annually, with rent abated from April 2026 through August 2026. Lease payments also include variable charges for the Company's proportionate share of building operating expenses and real estate taxes, based on a 2026 base year. The Company has the option to renew the lease for an additional five-year term; however, management determined that exercise of this option is not reasonably certain.

In connection with the lease, the Company maintained an automatically renewable standby letter of credit, collateralized by a high-yield savings account classified as long-term restricted cash. Following the execution of the July 2025 lease amendment, the related cash collateral was reclassified to restricted cash, current, as the letter of credit requirement was scheduled to terminate within 12 months. The letter of credit, which totaled $1.0 million immediately prior to its termination, was no longer required effective March 31, 2026, and the related cash collateral was released from restriction.

In June 2012, the Company entered into a long-term operating lease for office space in South San Francisco, California, which was subsequently amended in May 2014 and July 2015. As amended, the Company leased approximately 29,470 square feet of office space. The lease expired on March 31, 2026, and was not renewed.

In connection with the lease, the Company maintained an automatically renewable standby letter of credit, collateralized by a high-yield savings account classified as long-term restricted cash. As the lease approached expiration, the related cash collateral was reclassified to restricted cash, current, based on the anticipated release of the letter of credit within 12 months. The letter of credit, which totaled $1.1 million immediately prior to its termination, remained in effect for 60 days following the lease expiration. The letter of credit was subsequently terminated, and the related cash collateral was released from restriction during the three months ended September 30, 2026.

Total rent expense for the three months ended September 30, 2026 and 2025 was approximately $0.3 million and $1.1 million, respectively. Total rent expense for the nine months ended September 30, 2026 and 2025, was approximately $1.7 million and $3.4 million, respectively. For purposes of determining straight-line rent expense, the lease term is calculated from the date the Company first takes possession of the facility, including any periods of free rent and any renewal option periods that the Company is reasonably certain of exercising. The Company’s office leases generally have contractually specified minimum rent and annual rent increases that are included in the measurement of the ROU asset and related lease liability. Additionally, under these lease arrangements, the Company may be required to pay directly, or reimburse the lessors, for real estate taxes, insurance, utilities, maintenance, and other operating costs. Such amounts are generally variable and therefore not included in the measurement of the ROU asset and related lease liability but are instead recognized as variable lease expense in selling, general and administrative costs in the condensed consolidated statements of operations when they are incurred.

Future minimum lease payments as of  September 30, 2026 were as follows (in thousands):

In August 2023, the Company entered into a sublease agreement for 13,916 square feet of office space in Los Angeles, California, which commenced in November 2023 and expired on March 31, 2026. In the first quarter of 2025, the Company entered into an additional sublease agreement for 12,429 square feet of office space in Los Angeles, California, which commenced on April 1, 2025, and expired on March 31, 2026.

The Company recorded no operating sublease income for the three months ended  September 30, 2026, compared to $0.2 million for the three months ended  September 30, 2025. For the nine months ended  September 30, 2026 and 2025, the Company recorded operating sublease income of $0.2 million and $0.7 million, respectively. Sublease income was recognized in other income (expenses) in the condensed consolidated statements of operations.