Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies

Commitments and Contingencies

9. Commitments and Contingencies

Lease Obligations

In March 2019, the Company entered into an operating lease for 7,981 square feet of office and laboratory space with an end date of April 30, 2021 in Boston, Massachusetts. The Company subsequently terminated the operating lease in December 2020 without penalty.

In February 2020, the Company entered into an operating lease for 26,235 square feet of office and laboratory space in Boston, Massachusetts. Lease payments commenced in April 2020. The lease is subject to fixed rate escalation increases. The Company recognizes rent expense on a straight-line basis over the expected lease term, which is 5.7 years. The Company began to record rent expense in April 2020 upon gaining access to and control of the space. Deferred rent is amortized as a reduction in rent expense over the term of the lease. In addition, upon execution of the lease, the Company paid a security deposit of approximately $0.5 million, which is recorded as a component of other assets in the accompanying consolidated balance sheets as of December 31, 2021 and 2020. The Company has the option to terminate the lease after November 30, 2023 without penalty.

In June 2021, the Company entered into amendments to the operating lease for 8,631 square feet of additional office and laboratory space at its location in Boston, Massachusetts. The term of the amendments begin between July 2021 and March 2022 and run co-terminus with the existing lease. The Company has the same option to terminate the lease after November 30, 2023 without penalty. The Company was required to increase its total security deposit to $0.8 million as of the commencement date of the amendments.

The Company recorded $6.0 million and $1.9 million of rent expense for the years ended December 31, 2021 and 2020, respectively.

The minimum aggregate future lease commitments at December 31, 2021, are as follows (in thousands):

Years Ending December 31,
2022	$	8,526
2023		8,384
Total future lease payments	$	16,910

License Agreement

In 2017, the Company entered into an option agreement with a third party, in which the Company obtained an option to license all patents and patent applications specified in the agreement, involving work related to specified invention disclosures, and arising out of that sponsored research agreement entered into between the Company and such third party pursuant to which the Company sponsored certain discovery programs conducted by the third party. In 2018, the Company entered into a definitive license agreement with the third party in which the third party granted the Company an exclusive worldwide, sublicensable license to certain intellectual property under certain patent rights to research, develop, and otherwise commercialize a product generated from the licensed intellectual property. The Company concluded the assets acquired did not meet the accounting definition of a business as inputs, but no processes

or outputs were acquired with the licenses. As the inputs that were acquired along with the licenses do not constitute a “business,” the transaction has been accounted for as an asset acquisition under ASC 730. As of the date of the license agreement, the assets acquired had no alternative future use and the assets had not reached a stage of technological feasibility. The Company paid an upfront research fee of $0.4 million, paid in two installments of $0.2 million on June 30, 2019 and June 30, 2020, respectively, which were accrued and recognized as research and development expense in 2018. The Company agreed to pay an annual license maintenance fee for the license of less than $0.1 million for each contract year, beginning the third year of the contract until the first commercial contract year. The Company also issued a total of 86,558 shares of common stock pursuant to the 2018 agreement, which were recorded at fair value at the date of issuance of $0.2 million.

Should the Company pursue specified research, development, and commercial activities related to the above technology, the Company would be obligated to make milestone payments up to $2.6 million for each of the first three licensed products to achieve each milestone. The triggering of these milestone payments was not considered probable as of the transaction date, and no expense has been recorded for these milestones as of December 31, 2021 and 2020. In addition, the third party will receive tiered royalty payments on the applicable licensed program and platform products at a percentage ranging in single-digit royalties of net sales subject to reductions and offsets in certain circumstances, as well as a royalty on sublicensed consideration ranging from low to mid double-digit percentages of non-royalty sublicensing consideration. The Company concluded any milestone or royalty payments under the agreement were not probable as of December 31, 2021 and 2020. For each of the years ended December 31, 2021 and 2020, the Company reimbursed the third-party for patent costs of $0.1 million.