Operating Lease

6 Months Ended

Jun. 30, 2022

In April 2019, the Company entered into a twenty-eight month facility lease agreement for 2,760 square feet of office space in Pacific Palisades, California (the “Pacific Palisades Lease”). The Pacific Palisades Lease commenced on May 1, 2019, included four months of rent abatement and a rent escalation clause and was set to expire on August 31, 2021. In August 2021, the Company exercised its option to extend the term of the Pacific Palisades Lease for an additional three-year period and entered into an amendment to the lease agreement (the “Pacific Palisades Lease Amendment”). Pursuant to the Pacific Palisades Lease Amendment, the Company and the landlord agreed to extend the term for an additional period of three (3) years and six (6) months, until February 28, 2025, with an option to renew for an additional three (3) years in accordance with the terms of the Pacific Palisades Lease agreement. Included in the Pacific Palisades Lease Amendment were nine months of rent abatement and a rent escalation clause.

In April 2022, the Company entered into a lease agreement for 10,615 square feet of office space in Morristown, New Jersey (the “Morristown Lease”). The Morristown Lease has a term of seventy-three months, unless terminated sooner, and includes rent abatement for the first three months and the forty-seventh and forty-eighth calendar months after lease commencement. Included in the Morristown Lease agreement are fixed rent escalations of approximately 2% on each anniversary year of the lease term.

The following table summarizes information related to the Company’s lease (amounts in thousands):


	June 30, 2022		December 31, 2021
Assets:
Operating lease right-of-use assets	$	1,653	$	557

Liabilities:
Operating lease liabilities, current	$	324	$	131
Operating lease liabilities, non-current	1,444		474
Total operating lease liabilities	$	1,768	$	605

Rent expense is being recorded on a straight-line basis. Rent expense for the three and six months ended June 30, 2022 and 2021 is presented on the following table (amounts in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating leases rent expense	$	107	$	46	$	157	$	91

Cash paid for leases and included in operating cash flows for the six months ended June 30, 2022 and 2021 is presented on the following table (amounts in thousands):


	Six Months Ended June 30,
	2022		2021
Cash paid included in operating cash flows	$	90	$	91

The future minimum lease payments required under the operating lease as of June 30, 2022, are summarized below (amounts in thousands):


Future Minimum Lease Payments:
2022	$	201
2023	489
2024	502
2025	310
2026	230
Thereafter	388
Total minimum lease payments	$	2,120
Less: amount representing interest	$	(352)
Present value of operating lease liabilities	$	1,768
Less: operating lease liabilities, current	$	(324)
Operating lease liabilities, non-current	$	1,444
Remaining lease term (in years)	4.99
Incremental borrowing rate	7.44		%