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Commitments and Contingencies
 3 Months Ended
Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Operating Leases
The Company leases office and laboratory space in Uniondale, New York from NovaPark, a related party, under an agreement classified as an operating lease expiring on June 20, 2026. The Company's lease does not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. Variable expenses generally represent the Company's share of the landlord's operating expenses, including management fees. The Company does not act as a lessor or have any leases classified as financing leases.
The Company leased office space in Fort Lee, New Jersey, comprising approximately 2,105 square feet for approximately $0.1 million per year, under a non-cancelable operating lease through March 31, 2022. However, this arrangement is excluded from the calculation of lease liabilities and right of use assets as its term is less than one year. The lease was subject to charges for common area maintenance and other costs. The Company did not renew the New Jersey lease and it expired on March 31, 2022.
In July 2020, the Company entered into a lease for office furniture in San Francisco, California set to expire in July 2025, with an immaterial annual lease payment.
In February 2021, the Company entered into a lease for clinical and regulatory space in Newton, Massachusetts (the “Newton lease”), comprising approximately 6,157 square feet for approximately $0.2 million per year, under a non-cancelable operating lease through June 30, 2024. Pursuant to the Newton lease, the Company had four months of free rent starting from February 15, 2021 to June 14, 2021. The Company has one option to extend the term of the lease for three years with nine months’ notice.
The following table summarizes the components of the Company's operating lease costs (in thousands):
Three Months Ended March 31,
20222021
Operating lease cost
$413 $273 
Variable lease cost
52 130 
Short-term lease cost6 39 
Total operating lease cost
$471 $442 
The following table summarizes quantitative information about the Company's operating leases (dollars in thousands):
Three Months Ended March 31,
20222021
Operating cash flows from operating leases
$323 $267 
Right-of-use assets exchanged for operating lease liabilities
$— $618 
Weighted-average remaining lease term—operating leases (in years)
3.74.0
Weighted-average discount rate—operating leases
9.4 %8.0 %
As of March 31, 2022, maturities of lease liabilities were as follows (in thousands):
Year Ended December 31, Amounts
2022 (remaining nine months)$968 
20231,305 
20241,209 
20251,104 
2026516 
Total
5,102 
Less present value discount
(948)
Operating lease liabilities
$4,154 
Financing obligation
In 2021, the Company entered into an immaterial sale and leaseback arrangement with a third-party financing institution as a financing mechanism to fund certain of its capital expenditures primarily related to operating equipment, whereby the physical asset is sold concurrent with an agreement to lease the asset back. The initial leaseback term is 42 months starting from November 2021. The arrangement includes a renewal option as well as a repurchase option at fair value with a cap at the end of the term. The arrangement does not qualify as an asset sale as control of the equipment did not transfer to the third party and is accounted for as a failed sale-leaseback. Therefore, the Company accounts for the arrangement as a financing transaction and records the proceeds received as a financing obligation. The leased assets are included in property and equipment, net on the condensed consolidated balance sheets and are subject to depreciation.
The following table summarizes quantitative information about the Company's financing obligation for the three months ended March 31, 2022 (dollars in thousands):
Cash flow information:
Payments of financing obligation
Operating cash flows from financing obligation$10 
Financing cash flows from financing obligation$14 
Other information:
Weighted-average remaining lease term (in years)
3.0
Weighted-average discount rate (in percent)
1.1 %
Carrying value of leased asset included in Property and Equipment, net$254 
Depreciation associated with the leased asset$15 
As of March 31, 2022, maturities of financing obligation were as follows (in thousands):
Year Ended December 31, Amounts
2022 (remaining nine months)$71 
202394 
202494 
202531 
Total
290 
Less present value discount
(11)
Financing obligation
$279 
Litigation
The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims. From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities.
Indemnification
The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the fair value of these agreements is minimal.