The Company has historically entered into lease arrangements for its facilities. As of March 31, 2024, the Company had four operating leases with required future minimum payments. The Company determined the classification of these leases to be operating leases and recorded right-of-use assets and lease liabilities as of the effective date. The Company’s leases generally do not include termination or purchase options.

The Company entered into an agreement with an equipment leasing company in 2018, which provided up to $2.5 million for equipment purchases in the form of sale and leasebacks or direct leases. As of March 31, 2024, the Company has 11 active leases from the leasing company. The terms of the leases are three years and afterwards provide for either annual extensions or an outright purchase of the equipment.

The equipment leases require three advance rental payments to be held as security deposits. The security deposits held amounted to approximately $0.3 million as of March 31, 2024 and December 31, 2023, and are included in other non-current assets on the condensed balance sheets.

The Company has an operating lease for office space in Birmingham, Alabama, which was modified and expanded in March 2024 for a 60-month term ending in March 2029, with an option to extend five years, resulting in an increase to both the right of use assets and operating lease liabilities. Throughout the term of the lease, the Company is responsible for paying certain costs and expenses, in addition to the rent, as specified in the lease, including a proportionate share of applicable taxes, operating expenses and utilities.

The Company has an operating lease for office space in New York, New York, with a term that commenced on September 15, 2021, and continues through March 2027. Throughout the term of the lease, the Company is responsible for paying certain costs and expenses, in addition to the rent, as specified in the lease, including a proportionate share of applicable taxes, operating expenses and utilities.

The Company has identified an embedded lease within the University of Louisville Manufacturing Services Agreement, as the Company has the exclusive use of, and control over, a portion of the manufacturing facility and equipment of the facility during the contractual term of the manufacturing arrangement. The commencement date of the embedded lease was August 4, 2022 and it continues through August 2028.

The operating leases require security deposits at the inception of each lease. The security deposits amounted to approximately $0.3 million as of March 31, 2024 and December 31, 2023. As of March 31, 2024 and December 31, 2023, approximately $256,000 was included in restricted cash and $10,000 was included in other current assets.

The following table contains a summary of the lease costs recognized and other information pertaining to the Company’s finance and operating leases for the three months ended March 31, 2024 and 2023 (in thousands):


	Three Months Ended March 31,
	2024		2023
Lease Cost
Amortization of finance right-of-use assets	$	204	$	149
Interest on finance lease liabilities		27		14
Operating lease cost		304		112
Short-term lease cost		83		105
Variable lease cost		24		—
Total lease cost	$	642	$	380


	March 31, 2024
Other Lease Information
Cash paid for amounts included in the measurement of lease liability – finance leases	$	27
Cash paid for amounts included in the measurement of lease liability – operating leases	$	310
Weighted-average remaining lease term – finance leases (years)		1.57
Weighted-average remaining lease term – operating leases (years)		4.36
Weighted-average discount rate – finance leases		9.5	%
Weighted-average discount rate – operating leases		12.7	%

The following table reconciles the undiscounted cash flows to the operating and finance lease liabilities at March 31, 2024 (in thousands):


	Finance Leases		Operating Leases
Remainder of 2024	$	552	$	1,051
2025		501		1,401
2026		52		1,416
2027		—		1,224
2028		—		891
Thereafter		—		120
Total lease payment		1,105		6,103
Less: interest		74		1,419
Total lease liabilities		1,031		4,684
Less: short-term lease liability		680		856
Long-term lease liability	$	351	$	3,828