Lease Obligation

12 Months Ended

Dec. 31, 2022

14. LEASE OBLIGATION

On July 21, 2020, the Company entered into an operating lease agreement for 20,752 square feet of office, lab and animal care facility space located in Boston, Massachusetts for the Company’s corporate headquarters. The commencement date of the lease was February 19, 2021 and the lease term is 63 months. The base rent at commencement is $0.1 million per month and escalates by 3% annually for total lease payments during the term of $9.3 million.

The Company’s lease agreement requires the Company to maintain a cash letter of credit to secure their obligations under the lease of $0.9 million. This balance is included in other assets on the accompanying consolidated balance sheets. The Company recognized a right of use asset of $7.5 million and an operating lease liability of $7.5 million upon the commencement of the lease.

The components of the lease costs which are included in the consolidated statements of operations and comprehensive loss were as follows (in thousands):


	Year Ended December 31,
	2022		2021
Operating lease costs	$	1,764	$	1,693
Variable lease costs		466		479
Total lease costs	$	2,230	$	2,172

Variable lease cost primarily related to operating expenses, parking, taxes and insurance associated with the Company's operating leases.

Supplemental cash flow information relating to the Company’s leases were as follows (in thousands):


	Year Ended December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$	1,774	$	1,259

The remaining lease terms and discount rates related to the Company's leases were as follows:


	As of December 31,
	2022	2021
Remaining lease term	3.4 years	4.4 years
Discount Rate	7.7%	7.7%

The future minimum lease payments for the Company’s operating lease as of December 31, 2022, were as follows (in thousands):


Fiscal Year	Operating Leases
2023		1,827
2024		1,882
2025		1,938
2026		817
2027		—
Total minimum lease payments		6,464
Less amounts representing interest or imputed interest		770
Present value of lease liabilities	$	5,694