The Company’s only lease as of March 31, 2024 and December 31, 2023 was an operating lease for approximately 180,000 square feet of corporate office space, administrative areas and laboratories at 850 and 852 Winter Street in Waltham, Massachusetts, which includes 34,000 square feet of laboratory space (as amended, the “Winter Street Lease”). Under the terms of the Winter Street Lease, the Company also has the ability to sub-lease its corporate office and laboratory space. The original lease commenced in 2010 and was extended, at the Former Parent’s option, for approximately five years in 2020. The lease extension commenced in March 2021 for approximately 163,000 square feet of space and in September 2021 for the remaining approximately 17,000 square feet of space. The Winter Street Lease expires in 2026 and includes a tenant option to extend the term of the lease for an additional five-year period, which the Company is not reasonably certain to exercise.

The Winter Street Lease was assigned to the Company in connection with the Separation and is used solely for operations of the Company. The Former Parent has been primarily obligated to the landlord for the Winter Street Lease, and, following the Separation, the Former Parent is jointly and severally liable with the Company for, and continues to guarantee, all obligations under the Winter Street Lease. As of December 31, 2023, the Former Parent was the applicant with respect to a letter of credit security deposit that secured the obligations of the tenant under the Winter Street Lease. The Former Parent maintained a $1.9 million collateralized letter of credit (the “Former Parent Letter of Credit”) related to such security deposit as of December 31, 2023. As the Company did not have legal ownership over any bank accounts prior to the Separation, there were no cash or cash equivalents balances specifically attributable to the Company for the historical periods presented and, accordingly, no amount related to the Former Parent Letter of Credit was reflected in the consolidated financial statements prior to the Separation. On January 3, 2024, the Company entered into a $1.7 million collateralized letter of credit that secures the obligations of the tenant under the Winter Street Lease. This letter of credit replaced the $1.9 million Former Parent Letter of Credit.

As of the three months ended March 31, 2024 and 2023, the incremental borrowing rate for the Winter Street Lease was 3.52%. As of March 31, 2024, the remaining term for the operating lease was 2.6 years. During each of the three months ended March 31, 2024 and 2023, cash paid by the Company and, prior to the Separation, by the Former Parent, for amounts included for the measurement of lease liabilities was $1.6 million, and is included within cash flows from operating activities.

The following table summarizes the effect of lease costs in the Company’s unaudited condensed consolidated statements of operations and comprehensive loss:


	Three Months Ended
	March 31,
(in thousands)	2024		2023
Operating lease cost	$	1,406	$	1,550
Variable lease cost		1,235		1,199
Total lease cost	$	2,641	$	2,749

Future lease payments under non-cancelable leases as of March 31, 2024 consisted of the following:


(in thousands)	March 31, 2024
Remainder of 2024	$	4,895
2025		6,642
2026		2,484
Total operating lease payments	$	14,021
Less: imputed interest		(535	)
Total operating lease liabilities	$	13,486