On March 8, 2022, the Company amended the lease for its headquarters in Watertown, Massachusetts totaling 21,649 square feet (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 $0.7 million 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 second quarter of 2022, the Company recognized a $2.9 million increase to its lease liabilities and right-of-use (ROU) assets resulting from the lease amendment for the term extension of the laboratory and manufacturing operations space.

The lease for the New Premises commenced during the third quarter of 2022. The Company occupied the New Premises when the landlord substantially completed its construction for the space, after which the Company’s obligation to pay base rent began. The Company recognized an increase of $1.6 million to its lease liabilities and $1.7 million to its ROU assets resulting from the lease for the New Premises.

The Company previously provided a cash-collateralized $0.2 million 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.

On January 23, 2023, the Company entered into a lease agreement for its new standalone manufacturing facility, including office and lab space located at 600 Commerce Drive, Northbridge, Massachusetts. The new leased premises will consist of approximately 40,000 square feet. The lease includes a non-cancellable lease term of fifteen years and four months, with two options to extend the lease term for two additional terms of either five years or ten years at 95% of the then-prevailing fair market rent. The lease term will commence upon the substantial completion of construction of the facility and related leasehold improvements, which are owned by the lessor, to prepare the premises for the Company’s intended use, which is currently expected to occur during the second half of 2024. The Company’s obligation to pay base rent will begin four months following the commencement of the lease term. The lease will create significant rights and obligations for the Company, including the payment of base rent on monthly basis, of which the Company estimates will total approximately $40.8 million during the initial non-cancellable term of the lease (i.e., fifteen years and four months). The Company will be responsible for real estate taxes, maintenance, and other operating expenses applicable to the leased premises. As of December 31, 2023, a lease commencement date in accordance with ASC 842, Leases, had not occurred, as such, no ROU or lease liability has been recorded as of December 31, 2023.

Since the Company elected to account for each lease component and its associated non-lease components as a single combined component, all contract consideration was allocated to the respective lease components. The expected lease terms include non-cancellable lease periods. Renewal option periods have not been included in the determination of the lease terms as they are not deemed reasonably certain of exercise. Variable lease payments, such as common area maintenance, real estate taxes, and property insurance are not included in the determination of the lease’s ROU asset or lease liability.

As of December 31, 2023, the weighted average remaining term of the Company’s operating leases was 4.3 years and the weighted average discount rate was 5.84%.

Supplemental balance sheet information related to operating leases as of December 31, 2023 and 2022, respectively, is as follows (in thousands):


	December 31,		December 31,
	2023		2022
Other current liabilities – operating lease current portion	$	563	$	543
Operating lease liabilities – noncurrent portion		4,906		5,984
Total operating lease liabilities	$	5,469	$	6,527

Operating lease expense recognized was $1.4 million and $1.2 million, excluding $0.2 million and $0.06 million of variable lease costs, for the years ended December 31, 2023 and 2022, respectively, and was included in the accompanying consolidated statements of comprehensive loss.

Cash paid for amounts included in the measurement of operating lease liabilities was $1.4 million and $0.8 million for the years ended December 31, 2023 and 2022, respectively.

The Company’s total future minimum lease payments under non-cancellable leases at December 31, 2023, were as follows (in thousands):


	Operating Leases
2024	$	877
2025		1,494
2026		1,589
2027		1,637
2028		693
Total lease payments	$	6,290
Less imputed interest		(821	)
Total	$	5,469