The Company leases office and laboratory space in Menlo Park, CA, Redwood City, CA, and Boston, MA. As of December 31, 2021, except as described below, there have been no material changes in lease obligation from those disclosed in Note 12 to consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

On June 25, 2021, the Company entered into an amendment to the Menlo Park lease to extend the term of the lease from March 31, 2022 to June 30, 2022 and replace the previously leased premises (known as 173 and 175-177 Jefferson Drive) with another nearby premises (known as 235 Constitution Drive). The lease commenced on July 15, 2021 and expires on June 30, 2022. In connection with these changes, the Company will incur monthly rent payments ranging from $87,286 to $89,904, increasing over the remaining term of the lease. Given the lease is short-term in nature, the Company is using the practical expedient for the lease and has not recorded a right of use asset or lease liability. Therefore, the Company will recognize rent expense on a straight-line basis over the lease term.

On July 19, 2021, the Company entered into a Sublease (the Sublease Agreement) with RFS OPCO LLC (Sublessee), whereby the Company agreed to sublease to Sublessee all of the 9,501 rentable square feet of office space in Boston, MA, currently leased by the Company pursuant to the Company’s lease with 500 Boylston & 222 Berkeley Owner (DE) LLC, dated January 8, 2018, as amended (the Master Lease). The term of the sublease started on September 1, 2021 and ends on July 30,

2026. The aggregate base rent due to the Company under the Sublease is approximately $3.5 million starting October 1, 2021. The Company records sublease income as a reduction of lease expense. Upon execution of the Sublease Agreement, the Company received a cash security deposit of $0.1 million from the Subleasee which is recorded as other non-current liabilities in the consolidated balance sheets. The expected undiscounted cash flows to be received from the sublease as of December 31, 2021 is as follows (in thousands):



2022		657
2023		671
2024		685
2025		699
2026		416
Total	$	3,128

The Company recognized rent expense, net of sublease income, of $4.3 million and $0.9 million for the years ended December 31, 2021 and 2020, respectively.

The IBR and the remaining lease terms of our facilities and their weighted average IBR and remaining terms are as follows as of December 31, 2021:


Lease Locations	IBR	Remaining Terms (in years)
Redwood City, CA	6.90%	8.2
Boston, MA	9.30%	4.6
Menlo Park, CA	6.80%	0.5
Weighted Average	7.20%	7.7

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases for the years ended December 31, 2021 and 2020:


	December 31
	2021			2020
Lease Cost	(in thousands)			(in thousands)
Operating lease cost	$	4,282		$	894
Short-term lease cost		235			56
Variable lease cost		—			—
Sublease Income		(223	)		—
Total lease cost	$	4,294		$	950
Other Information
Operating cash flows used for lease liabilities	$	511		$	859
Operating lease right of use asset obtained in exchange of operating lease liability	$	—		$	22,367

As of December 31, 2021, operating right-of-use assets were $20.4 million and operating lease liabilities were $20.9 million. The Company has no material finance leases. The maturities of the operating lease liabilities as of December 31, 2021 were as follows (in thousands):


2022		2,933
2023		3,428
2024		3,525
2025		3,625
2026 and thereafter		13,747
Total undiscounted lease payments		27,258
Less: imputed interest		6,314
Total operating lease liability		20,944
Less: current portion		1,567
Operating lease liability, net of current maturities	$	19,377

The Company maintains letters of credit of $4.1 million, $0.2 million, and $0.2 million in connection with the Company’s office leases in Redwood City, CA, Menlo Park, CA, and Boston, MA, respectively. As of December 31, 2021, the cash amount associated with the Menlo Park Lease is recorded as restricted cash on the consolidated balance sheet. As of December 31, 2020, all cash amounts are recorded as restricted cash on the consolidated balance sheet.

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ liability insurance.

In connection with the Merger, seven lawsuits were filed against the Company, its directors, Former Adicet, and/or Merger Sub. which were either dismissed or settled for of $0.2 million in the fourth quarter of 2020.