On May 17, 2018, the Company amended the lease for its headquarters in Watertown, Massachusetts. The original five-year lease for approximately 13,650 square feet of combined office and laboratory space was set to expire in April 2019. Under the amendment, the Company leased an additional 6,590 square feet of rentable area of the building, with a commencement date of September 10, 2018. The amendment extended the term of the lease for the combined space through May 31, 2025, and the landlord provided the Company a construction allowance of up to $670,750 to be applied toward renovations and improvements within the total space. On April 5, 2021, the Company further amended the lease to include an additional 1,409 square feet of rentable area of the building, through May 31, 2025, with a commencement date of July 1, 2021.

On March 8, 2022, the Company further amended the lease (i) to extend the term to May 31, 2028 for 13,650 square feet of laboratory and manufacturing operations space, with the landlord agreeing to provide the Company a construction allowance of up to $555,960 to be applied toward upgrades and improvements within the space; (ii) to rent an additional 11,999 square feet of office space within the building through May 31, 2028 ("New Premises”); and (iii) to terminate a portion of the lease comprising 7,999 square feet of office space in the building in accordance with its existing contractual term on May 31, 2025. The amendment also reinstated the Company’s right to extend the lease for the space it occupies after May 31, 2025 for one additional period of five years. Rent for the extension period would be at the fair market rent for comparable space in comparable properties in the Watertown area.

During the three months ended June 30, 2022, the Company recorded an out-of-period adjustment. This adjustment was identified and corrected during the current financial closing process, and related to the quarterly period ended March 31, 2022 but was not reflected in its prior filings because it was deemed immaterial. The out-of-period adjustment reflected a $2.9 million increase to the Company’s lease liabilities and ROU assets resulting from the lease amendment for the term extension of the laboratory and manufacturing operations space. This out-of-period adjustment did not impact the Company’s statement of operations or cash flows.

The lease for the New Premises has not yet commenced; however, the lease will create significant rights and obligations for the Company as the lessee. Under the terms of the amendment, once the Company and the landlord approve the space plan for the build-out of the premises, the landlord will bear the entire cost of constructing the leasehold improvements according to that plan. The Company will bear 100% of the cost of any change-orders that it initiates; however, such costs are not anticipated to be significant. The Company plans to occupy the New Premises once the landlord substantially completes its construction for the space, which is expected to occur in the third quarter of 2022, after which the Company’s obligation to pay base rent will begin.

The Company previously provided a cash-collateralized $150,000 irrevocable standby letter of credit as security for the Company’s obligations under the lease, which will remain in effect through the period that is four months beyond the expiration date of the amended lease. The Company will also be required to pay its proportionate share of certain operating costs and property taxes applicable to the leased premises in excess of new base year amounts.

In July 2017, the Company leased approximately 3,000 square feet of office space in Basking Ridge, New Jersey under a lease term extending through June 2022, with two five-year renewal options at 95% of the then-prevailing market rates. In addition to base rent, the Company was obligated to pay its proportionate share of building operating expenses and real estate taxes in excess of base year amounts. In June 2018, the Company subleased an additional 1,381 square feet of adjoining space from Caladrius Biosciences, Inc. (“Caladrius”) through May 2022. The Chief Executive Officer of Caladrius was a director of the Company through June 2020. Per the terms of the lease and sublease agreements, the Company does not have any residual value guarantees. The Company gave notice to the landlord that the Company would not be renewing the lease and the Company vacated the facility upon expiration.

The Company identified and assessed the following significant assumptions in recognizing its right-of-use (“ROU”) assets and corresponding lease liabilities:

As of June 30, 2022, the weighted average remaining term of the Company’s operating leases was 5.6 years and the lease liabilities arising from obtaining ROU assets reflect a weighted average discount rate of 5.5%.

Supplemental balance sheet information related to operating leases as of June 30, 2022 and December 31, 2021 are as follows (in thousands):


	June 30,		December 31,
	2022		2021
Other current liabilities – operating lease current portion	$	301	$	645
Operating lease liabilities – noncurrent portion		4,826		1,860
Total operating lease liabilities	$	5,127	$	2,505

Operating lease expense recognized related to ROU assets were $288,000 and $213,000, excluding $3,000 and $9,000 of variable lease costs, for each of the three months ended June 30, 2022 and 2021, and $518,000 and $427,000, excluding $6,000 and $18,000 of variable lease costs, during each of the six months ended June 30, 2022 and 2021, respectively, and were included in general and administrative expense in the Company’s statement of comprehensive loss. Cash paid for amounts included in the measurement of operating lease liabilities was $238,000 and $221,000, for the three months ended June 30, 2022 and 2021, respectively, and $480,000 and $442,000 for the six months ended June 30, 2022 and 2021, respectively.

The Company is a party to two finance leases for laboratory equipment. The equipment leases expire in December 2022 and June 2023, respectively.

Supplemental balance sheet information related to the finance lease as of June 30, 2022 and December 31, 2021 are as follows (in thousands):


	June 30,			December 31,
	2022			2021
Property and equipment, at cost	$	270		$	371
Accumulated amortization		(172	)		(205	)
Property and equipment, net	$	98		$	166

Other current liabilities – finance lease current portion	$	105		$	137
Other long-term liabilities		—			36
Total finance lease liabilities	$	105		$	173

The components of finance lease expense recognized during the three and six months ended June 30, 2022 related to ROU assets was $34,000 and $68,000 and interest on lease liabilities was $4,000 and $8,000. Cash paid for amounts included in the measurement of finance lease liabilities were operating cash flows of $4,000 and $8,000 during the three and six months ended June 30, 2022, respectively, and financing cash flows of $34,000 and $67,000 for the three and six months ended June 30, 2022, respectively. The components of finance lease expense recognized during the three and six months ended June 30, 2021 related to ROU assets was $30,000 and $62,000 and interest on lease liabilities was $4,000 and $10,000. Cash paid for amounts included in the measurement of finance lease liabilities were operating cash flows of $4,000 and $10,000 during the three and six months ended June 30, 2021, respectively, and financing cash flows of $29,000 and $58,000 during the three and six months ended June 30, 2021, respectively.

As of June 30, 2022, the weighted average remaining term of the Company’s finance lease was 0.8 year and the lease liabilities arising from obtaining ROU assets reflect a weighted average discount rate of 12.5%.

The Company’s total future minimum lease payments under non-cancellable leases at June 30, 2022 were as follows (in thousands):


	Operating Leases			Finance Leases
Remainder of 2022	$	348		$	73
2023		701			37
2024		1,073			—
2025		1,113			—
2026		1,158			—
Thereafter		1,699			—
Total lease payments	$	6,092		$	110
Less imputed interest		(965	)		(5	)
Total	$	5,127		$	105