Commitments and Contingencies | 6. Commitments and Contingencies Operating Leases In June 2015, the Company executed a noncancelable operating lease for approximately 13,000 square feet of laboratory, research and development, and office space in Cranbury, New Jersey for an initial base rent of $ 20.00 per square foot. This location operates as the Company’s current headquarters. In June 2017, the Company obtained an additional noncancelable operating lease for about 6,000 square feet of laboratory space in the same corporate center at an initial rental rate at $ 22.00 per square foot. As a result of the additional space, both leases will expire June 2022 . In January 2022, the Company signed a lease extension for both leases for up to one additional year with the option to terminate upon 120 days of written notice, with an increase in base rent as per the lease extension. Both leases include a common area maintenance expense for $ 3.00 per square foot with an increase of 3% on the first month of each calendar year during the lease term and a management fee of 3 % of the base rent. The Company is obligated to pay, on a pro-rata basis, real estate taxes and operating costs related to the premises. In August 2018, the Company executed two noncancelable operating leases. One lease for approximately 6,000 square feet for vivarium, laboratory and general office space in South Brunswick, New Jersey. The initial annual base rent is $ 15.50 per square foot and a management fee of 3 % of the base rent. The Company is obligated to pay, on a pro-rata basis, insurance premiums, real estate taxes and operating costs related to the premises. The lease expires July 2022 . In January 2022, the Company signed a lease extension for up to one additional year with the option to terminate upon 120 days of written notice, with an increase in base rent as per the lease extension. The second lease is for office space in Lexington, Massachusetts, that expires August 2023 , with an option to renew for a one-time, three-year extension. The initial annual base rent is $ 28.50 per square foot and will increase $ 1.00 per square foot at the end of each rent year. In 2018, the Company received a lease incentive for the buildout of 420 Bedford Street in Lexington, MA. The Company was given an allowance for $ 165 on behalf of the lessor for construction of office space. Management recognizes this allowance as a lease incentive in its Right-of-Use asset and straight-lines the allowance throughout the term of the lease. As of June 30, 2022, the remaining rent incentive pertaining to the Lexington, MA lease totaled $ 45 . In January 2021, the Company signed a lease for 50,581 square feet of office and laboratory space at One Research Way in Princeton, New Jersey. The Company intends to relocate it's headquarters from Cranbury, NJ to One Research Way in Princeton, NJ. That lease term extends through 2032 , has a five-year extension option, and is intended to replace the Company’s two existing facilities and the space is expected to become the Company’s future headquarters . Payment under this lease will total $ 19,889 through May 2032 . The Company received a lease incentive of $ 4,046 from the lessor for a buildout of laboratory, vivarium, and office space, to be reimbursed to the Company in 2022. Management estimated the timing and amounts of reimbursements and included them as a reduction of lease payments when initially measuring the lease liability and right-of-use asset upon commencement. As of June 30, 2022, $ 1,612 of reimbursements were received. The components of lease cost for the three and six months ended June 30, 2022, and 2021, are as follows, in thousands: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Operating lease cost $ 530 $ 511 $ 1,042 $ 668 Variable lease cost 198 192 395 311 Total lease cost $ 728 $ 703 $ 1,437 $ 979 Amounts reported in the balance sheet for leases where the Company is the lessee as of June 30, 2022, and December 31, 2021, are as follows, in thousands: Operating Leases: June 30, December 31, Right-of-use assets, operating leases $ 9,670 $ 10,060 Operating lease liabilities, current $ 383 $ 403 Operating lease liabilities, non-current 12,211 10,790 Total operating lease liabilities $ 12,594 $ 11,193 Weighted-average remaining lease term (years) 9.61 10.02 Weighted-average discount rate 5.75 % 5.75 % Other information related to leases for the six months ended June 30, 2022 and 2021, respectively, as follows, in thousands: Six Months Ended June 30, 2022 2021 Net cash paid (received) for amounts included in the measurement of lease liabilities $ ( 750 ) $ 354 Leased assets obtained in exchange for new or modified operating lease liabilities — 10,314 Future minimum lease payments, net of reimbursements, remaining as of June 30, 2022, under operating leases by fiscal year were as follows, in thousands: Fiscal year 2022 $ ( 1,584 ) 2023 1,833 2024 1,814 2025 1,869 2026 1,925 Thereafter 11,477 Total minimum lease payments $ 17,334 Less: Amounts representing imputed interest ( 4,740 ) Present value of lease liabilities $ 12,594 Rent expense recorded during the three months ended June 30, 2022 and 2021 was $ 530 and $ 531 , respectively. Rent expense recorded during the six months ended June 30, 2022 and 2021 was $ 1,042 and $ 668 , respectively. The Company currently subleases the office space at 420 Bedford Street in Lexington, MA to another company. This sublease agreement expires in August, 2023 . In April 2021, the company entered into a sublease agreement with the previous tenants of the office space at 1 Research Way in Princeton, NJ, to begin April 2021 and end June 2021 . Sublease income recorded during the three months ended June 30, 2022 and 2021 was $ 26 and $ 85 , respectively. Sublease income recorded during the six months ended June 30, 2022 and 2021 was $ 55 and $ 60 , respectively. Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when future expenditures are probable and such expenditures can be reasonably estimated. |