Lease

12 Months Ended

Dec. 31, 2025

Note 8. Lease

The Company applies ASC Topic 842 to recognize assets and liabilities for leases with lease terms of more than 12 months on the balance sheet. The Company has elected to account for each separate lease component and non-lease component as one single component for all lease assets. Leases with terms of 12 months or less are not recorded on the balance sheet, and the related lease expenses are recognized on a straight-line basis over the lease term.

The Company has one operating lease agreement originally entered into in March 2017 for approximately 42,900 square feet for laboratory and office space located in Newark, California. In July 2021, the Company entered into a second amendment to its original facility lease agreement, as amended, for 15,000 square feet of additional office space in Newark, California.

On May 6, 2024, the Company amended its facility lease agreement (the “Amended Lease”) to extend the lease term for its existing office and laboratory space from one to 66 months and lease approximately 17,700 rentable square feet of additional office space, all located in Newark, California. The Company began occupying the additional space under the Amended Lease on July 1, 2024. The Amended Lease, which expires in November 2029, provides for an agreed-upon period of rent abatement and a tenant improvement allowance of $1.8 million. As a result of this amendment, the Company recorded an additional right-of-use-asset and the related liability of $10.5 million for the year ended December 31, 2024.

The Company provided the landlord with a $225,000 letter of credit collateralized by restricted cash as security deposit for the operating lease agreement. No additional security deposit was required pursuant to the Amended Lease. The Company is responsible for its proportional share of operating expenses and tax obligations.

Balance sheet information related to the Company’s operating lease is as follows for the periods presented (in thousands):


	December 31,
Operating Leases:	2025		2024
Operating lease right-of-use asset	$	7,829	$	9,417

Operating lease liability - current	$	2,283	$	510
Operating lease liability - noncurrent		8,040		10,356
Total operating lease liabilities	$	10,323	$	10,866

Weighted-average remaining lease term (years)		3.9		4.9
Weighted-average discount rate		5.7%		5.7%

Other information related to the Company’s operating lease is as follows for the periods presented (in thousands):


		Year Ended December 31,
		2025		2024		2023
Operating lease cost		$	2,308	$	2,459	$	2,335
Short-term rent expense			—		51		—
Less: Sublease income			—		(34)		(137)
Total lease expense		$	2,308	$	2,476	$	2,198

Supplemental cash flow information is as follows for the periods presented (in thousands):


		Year Ended December 31,
		2025		2024		2023
Operating cash flow used by operating leases		$	903	$	2,226	$	2,743
New operating lease asset obtained in exchange for operating lease liability		$	—	$	10,511	$	—

Future lease payments required under lease obligations as of December 31, 2025 are as follows (in thousands):


Year Ending December 31:		Amount
2026		$	2,787
2027			2,884
2028			2,985
2029			2,828
Thereafter			—
Total future minimum lease payments			11,484
Less: Imputed interest			(1,161)
Present value of lease liabilities		$	10,323

Protagonist Therapeutics, Inc 10-K