The Company leases office and laboratory space in Redwood City, California, and Boston, Massachusetts.

In 2018, Adicet Therapeutics executed a non-cancelable lease agreement, as amended in 2022, pursuant to which the Company leases office and laboratory facility at 1000 Bridge Parkway and a portion of 1200 Bridge Parkway in Redwood City, California (the Redwood City Lease).

On January 9, 2023, Adicet Therapeutics entered into a third lease amendment with Westport Office Park, LLC (the Third Amendment). The Third Amendment further amends the Redwood City Lease and increases the tenant improvement allowance as of January 1, 2023 by an additional $3.0 million. The Company fully utilized the allowance for the continued buildout of office and laboratory space at 1000 Bridge Parkway in 2023. Per the terms of this amendment, this additional allowance will be repaid through equal monthly payments of principal amortization and interest on a monthly basis over the term of the lease at an interest rate of eight percent (8%) per annum. The Company received the allowance on February 21, 2023 and increased the operating lease liability accordingly.

On August 7, 2023, Adicet Therapeutics entered into a fourth lease amendment with Westport Office Park, LLC (the Fourth Amendment). The Fourth Amendment amends the period over which the tenant improvement allowance received in the Third Amendment will be amortized and identifies the monthly amortization payable by the Company.

On September 1, 2023, Adicet Therapeutics amended its letter of credit with Westport Office Park, LLC. The amendment reduced the amount of the letter of credit associated with 1000 Bridge Parkway by $2.1 million resulting in an updated letter of credit amount of $2.1 million.

In 2018, the Company entered into a lease agreement, as amended in 2019, for office space at 500 Boylston St, Boston, Massachusetts (500 Boylston Lease). Under the terms of the 500 Boylston Lease, the Company was permitted to assign, sublease or transfer this lease, with the consent of the landlord.

On July 19, 2021, the Company entered into a sublease agreement with RFS OPCO LLC (Sublessee), whereby the Company agreed to sublease to Sublessee all of the 9,501 rentable square feet of 500 Boylston St. The expected undiscounted cash flows to be received from the sublease as of December 31, 2023 is as follows (in thousands):


	December 31, 2023
2024		722
2025		736
2026		438
2027 and thereafter		—
Total	$	1,896

The Company recognized rent expense, net of sublease income, of $4.0 million and $3.9 million for the years ended December 31, 2023 and 2022, respectively.

Further, the Company remains liable for the remaining lease payments under the 500 Boylston Lease, totaling $1.7 million, which is included in the future minimum lease payments table below.

The future minimum lease payments under all non-cancelable operating lease obligations as of December 31, 2023 were as follows (in thousands):


	December 31, 2023
2024		5,015
2025		4,662
2026		4,009
2027 and thereafter		12,090
Total undiscounted lease payments		25,776
Less: imputed interest		4,852
Total operating lease liability		20,924
Less: current portion		3,221
Operating lease liability, net of current maturities	$	17,703

The IBR and the remaining lease terms of our facilities and their weighted average IBR and remaining terms are as follows as of December 31, 2023:


Lease Locations	IBR	Remaining Terms (in years)
Redwood City, CA (1000 Bridge Parkway)	6.90%		6.20
Redwood City, CA (1200 Bridge Parkway)	6.80%		1.50
Boston, MA	9.30%		2.60
Weighted Average	7.10%		5.70

The following table presents the operating lease cost and information related to the operating lease right-of-use assets, net and operating lease liabilities for the year ended December 31, 2023 (in thousands):


	Twelve Months Ended December 31,
	2023			2022
Lease Cost
Operating lease cost	$	4,510		$	4,508
Short-term lease cost		195			133
Sublease income		(714	)		(704	)
Total lease cost	$	3,991		$	3,937
Other Information
Operating cash flows used for lease liabilities	$	(99	)	$	2,264
Weighted-average remaining lease term - operating leases		5.7			6.5
Weighted-average discount rate - operating leases		7.1	%		7.1	%

As of December 31, 2023, operating right-of-use assets were $17.4 million and operating lease liabilities were $20.9 million. The Company has no material finance leases.

The Company maintains letters of credit of $2.1 million and $0.2 million in connection with the Company’s office leases in Redwood City, CA and Boston, MA, respectively.

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ liability insurance.