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Leases | 3 Months Ended
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Mar. 31, 2022
Leases [Abstract] |
Leases |
7. | Leases
On May 17, 2018, the Company amended the lease for its headquarters in Watertown, Massachusetts. The original five-year lease for approximately 13,650 square feet of combined office and laboratory space was set to expire in April 2019. Under the amendment, the Company leased an additional 6,590 square feet of rentable area of the building, with a commencement date of September 10, 2018. The amendment extended the term of the lease for the combined space through May 31, 2025, and the landlord provided the Company a construction allowance of up to $670,750 to be applied toward renovations and improvements within the total space. On April 5, 2021, the Company further amended the lease to include an additional 1,409 square feet of rentable area of the building, through May 31, 2025, with a commencement date of July 1, 2021. On March 8, 2022, the Company further amended the lease (i) to extend the term to May 31, 2028 for 13,650 square feet of laboratory and manufacturing operations space, with the landlord agreeing to provide the Company a construction allowance of up to $555,960 to be applied toward upgrades and improvements within the space; (ii) to rent an additional 11,999 square feet of office space within the building through May 31, 2028, with an anticipated commencement date in the third quarter of 2022; and (iii) to terminate a portion of the lease comprising 7,999 square feet of office space in the building on May 31, 2025. The Company previously provided a cash-collateralized $150,000 irrevocable standby letter of credit as security for the Company’s obligations under the lease, which will remain in effect through the period that is four months beyond the expiration date of the amended lease. The Company will also be required to pay its proportionate share of certain operating costs and property taxes applicable to the leased premises in excess of new base year amounts. In July 2017, the Company leased approximately 3,000 square feet of office space in Basking Ridge, New Jersey under a lease term extending through June 2022, with two five-year renewal options at 95% of the then-prevailing market rates. In addition to base rent, the Company is obligated to pay its proportionate share of building operating expenses and real estate taxes in excess of base year amounts. In June 2018, the Company subleased an additional 1,381 square feet of adjoining space from Caladrius Biosciences, Inc. (“Caladrius”) through May 2022. The Chief Executive Officer of Caladrius was a director of the Company through June 2020. Per the terms of the lease and sublease agreements, the Company does not have any residual value guarantees. The Company has given notice to the landlord that the Company will not be renewing this lease and the Company will vacate the facility upon expiration. The Company identified and assessed the following significant assumptions in recognizing its right-of-use (“ROU”) assets and corresponding lease liabilities:
| • | As the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in calculating the present value of the lease payments. The Company utilized the borrowing rate under its CRG term loan facility (see Note 8) as the discount rate.
| • | Since the Company elected to account for each lease component and its associated non-lease components as a single combined component, all contract consideration was allocated to the combined lease component.
| • | The expected lease terms include noncancelable lease periods. Renewal option periods have not been included in the determination of the lease terms as they are not deemed reasonably certain of exercise.
| • | Variable lease payments, such as common area maintenance, real estate taxes and property insurance are not included in the determination of the lease’s ROU asset or lease liability.
As of March 31, 2022, the weighted average remaining term of the Company’s operating leases was 3.1 years and the lease liabilities arising from obtaining ROU assets reflect a weighted average discount rate of 12.5%. Supplemental balance sheet information related to operating leases as of March 31, 2022 and December 31, 2021 are as follows (in thousands):
| March 31, |  |  | December 31, |
| 2022 |  |  | 2021 |
Other current liabilities – operating lease current portion | $ | 641 |  |  | $ | 645 |
Operating lease liabilities – noncurrent portion |  | 1,697 |  |  |  | 1,860 |
Total operating lease liabilities | $ | 2,338 |  |  | $ | 2,505 |
Operating lease expense recognized related to ROU assets were $229,000 and $213,000, excluding $3,000 and $9,000 of variable lease costs, for each of the three months ended March 31, 2022 and 2021, and were included in general and administrative expense in the Company’s statement of comprehensive loss. Cash paid for amounts included in the measurement of operating lease liabilities was $242,000 and $221,000, respectively, for the three months ended March 31, 2022 and 2021. The Company is a party to two finance leases for laboratory equipment. The equipment leases expire in December 2022 and June 2023, respectively. Supplemental balance sheet information related to the finance lease as of March 31, 2022 and December 31, 2021 are as follows (in thousands):
| March 31, |  |  | December 31, |
| 2022 |  |  | 2021 |
Property and equipment, at cost | $ | 270 |  |  | $ | 371 |
Accumulated amortization |  | (138 | ) |  |  | (205 | )
Property and equipment, net | $ | 132 |  |  | $ | 166 |
Other current liabilities – finance lease current portion | $ | 122 |  |  | $ | 137 |
Other long-term liabilities |  | 18 |  |  |  | 36 |
Total finance lease liabilities | $ | 140 |  |  | $ | 173 |
The components of finance lease expense recognized during the three months ended March 31, 2022 related to ROU assets was $34,000 and interest on lease liabilities was $5,000. Cash paid for amounts included in the measurement of finance lease liabilities were operating cash flows of $5,000 and financing cash flows of $33,000 for the three months ended March 31, 2022. Cash paid for amounts included in the measurement of finance lease liabilities were operating cash flows of $6,000 and financing cash flows of $18,000 for the three months ended March 31, 2021. As of March 31, 2022, the weighted average remaining term of the Company’s finance lease was 1 year and the lease liabilities arising from obtaining ROU assets reflect a weighted average discount rate of 12.5%. The Company’s total future minimum lease payments under non-cancellable leases at March 31, 2022 were as follows (in thousands):
| Operating Leases |  |  | Finance Leases |
Remainder of 2022 | $ | 669 |  |  | $ | 111 |
2023 |  | 877 |  |  |  | 37 |
2024 |  | 894 |  |  |  | — |
2025 |  | 373 |  |  |  | — |
Total lease payments | $ | 2,813 |  |  | $ | 148 |
Less imputed interest |  | (475 | ) |  |  | (8 | )
Total | $ | 2,338 |  |  | $ | 140 |

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