At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the circumstances present. The Company determines a lease exists if the contract conveys the right to control an identified asset for a period of time in exchange for consideration. Control is considered to exist when the lessee has the right to obtain substantially all of the economic benefits from the use of an identified asset as well as direct the right to use of that asset. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less on the lease commencement date. If a contract is considered to be a lease, the Company recognizes a lease liability based on the present value of the future lease payments over the expected lease

term, with an offsetting entry to recognize a right-of-use asset. The Company has also elected to use the practical expedient and account for each lease component and related non-lease component as one single component. The lease component results in a right-of-use asset being recorded on the balance sheet and amortized as lease expense on a straight-line basis.

The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a term similar to the term of the lease for which the rate is estimated. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.

The Company leases office and research space in Rockville, Maryland under an operating lease with a term from June 15, 2015 through October 31, 2023 (as amended to date, the Lease) that is subject to annual rent increases. The Company paid a security deposit of $52,320 to be held until the expiration or termination of the Company’s obligations under the Lease. The Company has a renewal option as set forth in the Lease.

The Company identified and applied the following significant assumptions in recognizing the right-of-use asset and corresponding liability for the Lease:

As of December 31, 2022 the weighted-average remaining lease term was 0.8 years. There were no additional operating leases entered into during the year ended December 31, 2022.

The components of lease expense and related cash flows were as follows:


	Year Ended December 31,
	2022		2021			2020
Operating lease cost	$	927,957	$	927,957	$	927,957
Variable lease cost		612,391		490,871		593,973
Total operating lease cost	$	1,540,348	$	1,418,828	$	1,521,930

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases	$	1,104,406	$	1,077,469	$	1,051,190

Maturities of lease liability due under these lease agreements as of December 31, 2022 were as follows:


	Operating Lease
	Obligation
2023	$	940,842
Thereafter		—
Total		940,842
Present value adjustment		(22,287)
Present value of lease payments	$	918,555