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LEASES

9 Months Ended

Sep. 30, 2023

NOTE 8 – LEASES

The Company leases space under operating leases for administrative, manufacturing and laboratory facilities in Cleveland, Ohio. The Company also leases office space in New York, New York, that the Company sublets. The Company also leases certain office equipment under operating leases, which have a non-cancelable lease term of less than one year and, therefore, the Company has elected the practical expedient to exclude these short-term leases from the Company’s right-of-use assets and lease liabilities.

In June 2023, the Company terminated one of its operating leases for office space. The termination resulted in a gain of $1.1 million representing the difference between the carry value of the right-of-use assets and the related lease liabilities. This gain was recorded in the nine months ended September 30, 2023, and is included in loss/(gain) on right-of-use lease assets in the condensed consolidated statement of operations and comprehensive loss.

On March 31, 2022, the Company announced that they were pursuing a strategic partner to take over development activities of ABO-102 and that the Company was discontinuing development of ABO-101. As a result of this shift in priorities, the Company determined the portion of the lease that was dedicated to the future facility for the ABO-101 and ABO-102 programs, had no future value and thus, the Company recorded an impairment charge of $1.6 million for the nine months ended September 30, 2022.

The following table provides a summary of the Company’s operating lease liabilities (in thousands):

SUMMARY OF OPERATING LEASE LIABILITIES

	September 30, 2023		December 31, 2022

Current operating lease liability	$	1,649	$	1,773
Non-current lease liability		4,043		5,854
Total lease liability	$	5,692	$	7,627

Lease costs and rent are reflected in general and administrative expenses and research and development expenses in the condensed consolidated statements of operations and comprehensive loss, as determined by the underlying activities. The following table provides a summary of the components of lease costs and rent (in thousands):

SCHEDULE OF COMPONENTS OF LEASE COST

	2023		2022		2023		2022
	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022

Operating lease cost	$	340	$	467	$	1,048	$	1,400
Variable lease cost		66		154		281		366
Short-term lease cost		19		17		50		58
Total operating lease costs	$	425	$	638	$	1,379	$	1,824

Cash paid for amounts included in the measurement of operating lease liabilities was $0.3 million and $0.2 million for the three months ended September 30, 2023 and 2022, respectively and $0.9 million and $1.1 million for the nine months ended September 30, 2023 and 2022, respectively.

Future minimum lease payments and obligations, which do not include short-term leases, of the Company’s operating lease liabilities as of September 30, 2023 were as follows (in thousands):

Future minimum lease payments and obligations	Operating Leases

2023, remainder	$	403
2024		993
2025		1,552
2026		791
2027		807
Thereafter		2,516
Total undiscounted operating lease payments		7,062
Less: imputed interest		1,370
Present value of operating lease liabilities	$	5,692

The weighted-average remaining term of the Company’s operating leases was 66 months and the weighted-average discount rate used to measure the present value of the Company’s operating lease liabilities was 7.4% as of September 30, 2023.

Future cash receipts from the Company’s sublease agreements as of September 30, 2023 are as follows (in thousands):

	Operating
Future cash receipts	Subleases

2023, remainder	$	156
2024		634
2025		485
Total future cash receipts	$	1,275