Leases

9 Months Ended

Sep. 30, 2022

Cumberland’s significant operating leases include the lease of approximately 25,500 square feet of office space in Nashville, Tennessee for its corporate headquarters. This lease expired in October 2022. The Company's operating leases also include the lease of approximately 14,200 square feet of wet laboratory and office space in Nashville, Tennessee by CET, our majority-owned subsidiary, where it operates the CET Life Sciences Center. This lease currently expires in April 2023.

Operating lease liabilities are recorded as the present value of remaining lease payments not yet paid for the lease term discounted using the incremental borrowing rate associated with each lease. Operating lease right-of-use assets represent operating lease liabilities adjusted for lease incentives and initial direct costs. As Cumberland’s leases do not contain implicit borrowing rates, the incremental borrowing rates were calculated based on information available at January 1, 2019. Incremental borrowing rates reflect the Company’s estimated interest rates for collateralized borrowings over similar lease terms. The weighted-average incremental borrowing rate used to discount the present value of the remaining lease payments is 7.42%. The weighted-average remaining lease term at September 30, 2022 is 0.4 years.

On November 15, 2021, Cumberland entered into a lease, pursuant to which the Company will lease approximately 16,631 rentable square feet of space (the “Leased Premise”) at the new Broadwest development located in Nashville, Tennessee with 1600 West End Avenue Partners, LLC. The Leased Premise will serve as the Company's new corporate headquarters. The initial term of the Lease is one hundred fifty-seven (157) months, with two consecutive options to renew for a period of five years each. The Broadwest lease calls for monthly base rent, operating expense and parking payments. In year 1, the base rent starts at $33.06 per square foot of rentable area. The lease also provides for several months of free rent plus a tenant improvement allowance. Cumberland received approval for its building permit and began construction on the Leased Premise in June 2022. On October 25, 2022, Cumberland received final building approval and a certificate of occupancy for the Leased Premise.

Lease Position

At September 30, 2022 and December 31, 2021, the Company's lease assets and liabilities were as follows:


Right-of-Use Assets	September 30, 2022		December 31, 2021
Operating lease right-of-use assets	$	219,850	$	1,024,200


Lease Liabilities	September 30, 2022		December 31, 2021
Operating lease current liabilities	$	229,605	$	969,677

Operating lease noncurrent liabilities	—		90,016
Total	$	229,605	$	1,059,693

As of September 30, 2022, cumulative future minimum sublease income under non-cancelable operating subleases totals approximately $0.2 million and will be paid through the leases ending in October 2022 and April 2023. Excluding the Broadwest lease agreement, future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) are as follows:


Maturity of Lease Liabilities at September 30, 2022	Operating Leases
2022	150,533
2023	92,477
Total lease payments	243,010
Less: Interest	13,405
Present value of lease liabilities	$	229,605

Rent expense is recognized over the expected term of the lease, including renewal option periods, if applicable, on a straight-line basis as a component of general and administrative expense. Rent expense and sublease income were as follows:


	Nine months ended September 30,
	2022		2021
Rent expense	$	861,398	$	910,975

Sublease income	$	424,632	$	526,868