Right of Use Assets and Lease Liabilities

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Right of Use Assets and Lease Liabilities

Right of Use Assets and Lease Liabilities

In 2014, the Company entered into a long-term lease with a related party, which, as amended, provided for a lease of useable laboratory and office space located in New York, New York. A member of the Company’s board of directors is the Executive Chairman of the parent company to the landlord under this lease. Concurrent with this lease, the Company entered into a license agreement to occupy certain vivarium-related space in the same facility for the same term and rent escalation provisions as the lease. This license has the primary characteristics of a lease and is characterized as a lease. In September 2018, the Company further amended the lease to obtain an additional office space beginning October 1, 2018 and to extend the term of the lease for previously acquired space. The lease, as amended, has a term of 14.3 years ending in May 2029.

The Company has also entered into an agreement (the “Vehicle Lease”) with a company (the “Lessor”) to obtain motor vehicles for certain employees. The Vehicle Lease provides for individual leases for the vehicles, which at each lease commencement was determined to qualify for operating lease treatment. The contractual period of each lease is 12 months, followed by month-to-month renewal periods. The Company estimates the lease term for each vehicle to be 12 months. Leases which the Company determined to have a lease term of 12 months or less will be treated as short-term in accordance with the accounting policy election and are not recognized on the balance sheet. Each lease permits either party to terminate the lease at any time via written notice to the other party. The Company neither acquires ownership of, nor has the option to purchase the vehicles at any time. The Company is required to maintain an irrevocable $1.75 million letter of credit that the Lessor may draw upon in the event the Company defaults on the Vehicle Lease, which has been recorded as restricted cash on the condensed consolidated balance sheets.

The Company has no other significant leases. In addition, no identified leases require allocations between lease and non-lease components.

The following tables present the lease balances within the condensed consolidated balance sheets, weighted average remaining lease term, and the weighted average discount rates related to leases as of June 30, 2023 and December 31, 2022 and operating cash outflows as of June 30, 2023 and 2022 (in thousands, except years and percentages):

	June 30, 2023		December 31, 2022
Other information
Weighted average remaining lease term	5.8 years		5.9 years
Weighted average discount rate	9.07	%	8.76	%

	Six Months Ended June 30,
	2023		2022
Lease cost
Operating lease cost	$	2,003	$	2,843
Variable lease cost	724		806
Short-term lease cost	599		—
	$	3,326	$	3,649

Maturity analyses under the lease agreements are as follows (in thousands):

Six months ending December 31, 2023	$	1,848
Year ending December 31, 2024	3,792
Year ending December 31, 2025	3,907
Year ending December 31, 2026	3,974
Year ending December 31, 2027	4,022
Thereafter	5,915
Total	23,458
Less: Present value discount	(5,468)
Total operating lease liability	17,990
Less: Current portion	(3,558)
Operating lease liabilities, non-current	$	14,432