Leases

12 Months Ended

Dec. 31, 2021

LEASES

The Company has lease agreements for its facilities in Boston, Massachusetts, which is the Company’s principal executive offices; Vienna, Austria, which is the Company’s research and development center; and Waltham, Massachusetts, which the Company has sublet to a third party. The Company previously had a lease agreement for a facility in Cambridge, Massachusetts, which served as its prior corporate headquarters. There are no restrictions or financial covenants associated with any of the lease agreements.

Boston Lease— The Company leases approximately 28,000 square feet of office space in Boston, Massachusetts (“Boston Lease”), which leased was entered into in November 2019 and 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 $0.9 million for the benefit of the landlord.

For the Boston lease, the Company participated in the construction of the office space and incurred construction costs to prepare the office space for its use, which have been partially reimbursed by the landlord. The Company concluded that these construction costs generate and enhance the landlord’s assets, and, as such, unreimbursed construction costs incurred to prepare the office space for its use have been classified a part of the right-of-use asset. The commencement date for the Boston Lease was September 1, 2020 upon substantial completion of the landlord's asset. On the commencement date, the Company recognized a lease liability of $4.6 million reflecting the future rent payments for the term of the Boston Lease discounted at the Company’s collateralized borrowing rate, and a right-of-use asset of $8.0 million measured as the lease liability plus rent payments made and unreimbursed construction costs incurred prior to the commencement date. The Company began recognizing rent expense following the commencement date.

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 5 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 5 year term of the lease.

Vienna Austria Leases— The Company has 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 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, will be approximately $300 thousand.

Cambridge Lease— In August 2017, the Company entered into a non-cancellable operating lease agreement for office space of

approximately 13,000 square feet in Cambridge, Massachusetts (“Cambridge Lease”), which had an original expiration date of

July 31, 2022. Base rent was approximately $832 thousand annually and the monthly rent expense was recognized on a straight-line basis over the term of the lease as the Company amortizes the associated operating lease right-of-use asset. The Company reached an agreement with the landlord on July 17, 2020 to terminate the lease effective September 30, 2020 in exchange for a fee. The Company accounted for the lease modification prospectively from the date of the termination through the new lease termination date of September 30, 2020, at which time the right-of-use asset and associated lease liabilities were retired from the consolidated balance sheet. The Company was required to maintain a letter of credit of $264 thousand, secured by restricted cash, for the benefit of the landlord through December 31, 2020.

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 an amount equal to the lease payments in a similar economic environment.

The components of lease expense for the three years ended December 31, 2021, 2020, and 2019 were as follows (dollars in thousands):


	For the Year Ended December 31,
Lease Cost	2021			2020			2019
Fixed operating lease cost	$	2,087		$	1,290		$	827
Short-term lease costs	42			157			122
Total lease expense	$	2,129		$	1,447		$	949
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,257		$	3,820		$	1,007
Leased assets obtained in exchange for new operating lease liabilities	$	1,343		$	5,090		$	484
Weighted-average remaining lease term—operating leases	5.0 years			5.5 years			3.0 years
Weighted-average discount rate—operating leases	11.3		%	11.2		%	9.0		%
Sublease income	$	196		$	194		$	14

Maturities of lease liabilities due under lease agreements that have commenced as of December 31, 2021 are as follows (in thousands):


Maturity of lease liabilities	Operating Leases
2022	$	1,596
2023	1,625
2024	1,390
2025	1,418
2026 and thereafter	1,693
Total lease payments	7,722
Less: interest	(1,871)
Total operating lease liabilities as of December 31, 2021	$	5,851