Leases

9 Months Ended

Sep. 30, 2021

LEASES

The Company has lease agreements for its facilities in Boston, Massachusetts, which is the Company’s principal executive office; Vienna, Austria, which is the Company’s research and development center; and Waltham, Massachusetts, which the Company has sublet to a third party. There are no restrictions or financial covenants associated with any of the lease agreements.

Vienna Austria Leases— The Company had an operating lease, as amended, for approximately 400 square meters of laboratory and office space in Vienna, Austria, which commenced on March 1, 2019, as amended, for a term of approximately 2 years terminating in April 2021. The annual base rent for the previous lease was approximately $154 thousand. In September 2020, the Company entered into a new operating lease for approximately 1,200 square meters of laboratory and office space in Vienna, Austria (“Vienna Lease”), which commenced in February 2021 following construction of laboratory and office space for a term of 7 years. The Company contributed $709 thousand to building improvements, which are classified as part of the right-of-use asset. The Company recorded a right-of-use asset and associated lease liabilities upon the commencement of the Vienna Lease in the first quarter of 2021. The annual base rent for the Vienna Lease, following a 6-month rent free period, is approximately $300 thousand.

Boston Lease— The Company leases approximately 28,000 square feet of office space in Boston, Massachusetts (“Boston Lease”), which serves as the Company’s headquarters. Base rental payments are approximately $1.0 million annually, plus certain operating expenses. The term of the Boston Lease will continue until November 2026, unless earlier terminated. The Company has the right to sublease the premises, subject to landlord consent and also has the right to renew the Boston Lease for an additional five years at the then prevailing effective market rental rate. The Company is required to maintain a security deposit in the form of a letter of credit for $855 thousand for the benefit of the landlord.

Waltham Lease— The Company leases approximately 6,000 square feet of office space in Waltham, Massachusetts (“Waltham Lease”). The Waltham Lease, as amended, commenced on January 1, 2019, and expires approximately five years from the commencement date. The base rent is approximately $263 thousand annually. In addition to the base rent, the Company is also responsible for its share of operating expenses, electricity and real estate taxes, which costs are not included in the determination of the leases’ right-of-use assets or lease liabilities. The Company is subleasing the space to a third party for the duration of the lease. The right-of-use asset is being amortized to rent expense over the five-year term of the lease.

As the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in calculating the present value of the lease payments. The Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment.

The components of lease expense for the three and nine months ended September 30, 2021 and 2020 were as follows:


(dollars in thousands)	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
Lease Cost	2021			2020		2021		2020
Fixed operating lease cost	$	537		$	413	$	1,554	$	847
Short-term lease costs	—			40		42		116
Total lease expense	$	537		$	453	$	1,596	$	963
Other information
Right-of-use asset obtained in exchange for operating lease liabilities	$	—		$	4,646	$	1,343	$	4,646
Operating cash flows from operating leases	$	314		$	479	$	917	$	963
Sublease income	$	49		$	49	$	147	$	146
Weighted-average remaining lease term—operating leases	5.2 years
Weighted-average discount rate—operating leases	11.3		%

Maturities of lease liabilities due under lease agreements that have commenced as of September 30, 2021 are as follows (in thousands)


Maturity of lease liabilities	Operating Leases
2021 (remainder of the year)	$	396
2022	1,604
2023	1,632
2024	1,397
2025	1,425
Thereafter	1,708
Total lease payments	8,162
Less: interest	(2,054)
Total operating lease liabilities as of September 30, 2021	$	6,108