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Leases | 6 Months Ended
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Jun. 30, 2024
Leases [Abstract] |
Leases | Leases Redwood City The Company has a lease for facilities in Redwood City, California (“Redwood City Premises”), which expires December 31, 2031, with an option to extend for a period of eight years. Related to this lease, the Company provided the landlord with a letter of credit, as amended, in the amount of $1.9 million, which is classified as restricted cash under long term assets on the Company’s condensed consolidated balance sheets. Prior to September 30, 2023, the Company had two facility leases in Redwood City. In March 2023, the Company entered into an amendment to accelerate the expiration of the lease for one of the facilities in its Redwood City Premises from December 31, 2031 to September 30, 2023. Concurrently, the Company entered into an agreement for additional tenant improvement allowance towards its other Redwood City Premises. The Company accounted for this amendment as a lease modification in accordance with ASC 842-10-25-11(d). As a result of the modification the Company revalued the lease liability based on the new and remaining lease terms, which resulted in a reduction to the lease liability of $8.3 million, and recognized the remeasurement to the lease liabilities as an adjustment to the right-of-use asset. The estimated value of non-cash consideration, composed primarily of leasehold improvements and furniture and fixtures, was $14.9 million, which was fully amortized as of September 30, 2023. There was no charge recognized in the consolidated statement of operations. North Carolina On January 8, 2021, the Company entered into an operating lease agreement for a building in North Carolina (“NC Premises”). The lease commenced in April 2021 when the Company obtained control of the NC Premises, and the lease term expires in October 2037 with two options to extend the lease term for a period of five years each. On October 26, 2021, the Company entered into a sublease agreement with a subtenant for the NC Premises through October 2037, the remainder of the lease term, and concurrently changed the lease payment terms of the head lease. In addition, the remainder of the tenant improvement allowance under the original lease of approximately $22.7 million was transferred to the subtenant. This change in the Company’s payment terms with the landlord at the time of the sublease was considered to be a lease modification and the Company remeasured the lease liability and right-of-use asset on the modification date, with no amounts recognized in the consolidated statement of operations. The base annual rental rates, payment schedules and amounts under the sublease agreement are substantially the same as the original payment terms by Adverum to the landlord. On April 3, 2023, the Company entered into an amendment of the lease of its NC Premises with the landlord and subtenant. Under this amendment, the parties agreed to substantially reduce the total tenant improvement allowance in exchange for lower monthly rent. The Company accounted for this amendment as a lease modification in accordance with ASC 842-10-25-11(d). The Company remeasured the lease liability, resulting in a reduction to the lease liability with a corresponding reduction of the right-of-use asset of $5.7 million in the quarter ended June 30, 2023. There was no charge recognized in the consolidated statement of operations. During the year ended December 31, 2022, management reassessed the probability of collection of the deferred rent receivable from the subtenant over the remaining term of a sublease. At that time, management assessed the collectability to be less than probable and recognized an adjustment to eliminate the deferred rent receivable as a current period adjustment during the year ended December 31, 2022. Deferred rent receivable was zero as of December 31, 2023. During the three months ended June 30, 2024, given the recent funding obtained by the subtenant, management reassessed the probability of the collection of the deferred rent receivable from the subtenant over the remaining term of the sublease. The Company assessed the collectibility to be probable and recognized a cumulative catch-up adjustment for the difference between the straight-line lease income that would have been recognized if collectability had always been assessed as probable and the lease income recognized from lease commencement to date. Consequently, the Company has recognized $7.0 million in sublease income, representing the straight-line sublease income since inception less sublease income recognized as of June 30, 2024. This adjustment decreased general and administrative expense and net loss by $7.0 million and resulted in a $0.33 and $0.37 reduction in the Company’s basic and diluted net loss per common share for the three and six months ended June 30, 2024, respectively. Excluding the adjustment, the net loss and net loss per common share for the three and six months ended June 30, 2024 would have been $25.4 million and $50.2 million and $1.22 and $2.68 per share, respectively. This change is not expected to have a material effect in future periods. Sublease income was $8.2 million and $9.6 million for the three and six months ended June 30, 2024, respectively, and $1.4 million and $2.8 million for the three and six months ended June 30, 2023, respectively, and was classified as a reduction of rent expense in general and administrative expense.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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