Commitments and Contingences

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

9. Commitments and Contingencies

Operating Leases

The Company leases office and laboratory space in Redwood City, California, and Boston, Massachusetts.

Redwood City

In 2018, Adicet Therapeutics executed a non-cancelable lease agreement, as amended in 2022, pursuant to which the Company leases office and laboratory facility at 1000 Bridge Parkway and a portion of 1200 Bridge Parkway in Redwood City, California (the Redwood City Lease).

On January 9, 2023, Adicet Therapeutics entered into a third lease amendment with Westport Office Park, LLC (the Third Amendment). The Third Amendment further amends the Redwood City Lease and increases the tenant improvement allowance as of January 1, 2023 by an additional $3.0 million. The Company fully utilized the allowance for the continued buildout of office and laboratory space at 1000 Bridge Parkway in 2023. Per the terms of this amendment, this additional allowance will be repaid through equal monthly payments of principal amortization and interest on a monthly basis over the term of the lease at an interest rate of eight percent (8%) per annum. The Company received the allowance on February 21, 2023 and increased the operating lease liability accordingly.

On August 7, 2023, Adicet Therapeutics entered into a fourth lease amendment with Westport Office Park, LLC (the Fourth Amendment). The Fourth Amendment amends the period over which the tenant improvement allowance received in the Third Amendment will be amortized and identifies the monthly amortization payable by the Company.

On September 1, 2023, Adicet Therapeutics amended its letter of credit with Westport Office Park, LLC. The amendment reduced the amount of the letter of credit associated with 1000 Bridge Parkway by $2.1 million resulting in an updated letter of credit amount of $2.1 million.

Boston

In 2018, the Company entered into a lease agreement, as amended in 2019, for office space at 500 Boylston St, Boston, Massachusetts (500 Boylston Lease). Under the terms of the 500 Boylston Lease, the Company was permitted to assign, sublease or transfer this lease, with the consent of the landlord.

On July 19, 2021, the Company entered into a sublease agreement with RFS OPCO LLC (Sublessee), whereby the Company agreed to sublease to Sublessee all of the 9,501 rentable square feet of 500 Boylston St. The expected undiscounted cash flows to be received from the sublease as of June 30, 2024 is as follows (in thousands):


	June 30, 2024
2024	$	361
2025		736
2026		438
2027 and thereafter		—
Total	$	1,535

Further, the Company remains liable for the remaining lease payments under the 500 Boylston Lease, totaling $1.4 million, which is included in the future minimum lease payments table below.

The future minimum lease payments under all non-cancelable operating lease obligations as of June 30, 2024 were as follows (in thousands):


	June 30, 2024
2024	$	2,533
2025		4,662
2026		4,009
2027		3,714
2028 and thereafter		8,376
Total undiscounted lease payments		23,294
Less: imputed interest		(4,162	)
Total operating lease liability		19,132
Less: current portion		(3,421	)
Operating lease liability, net of current maturities	$	15,711

The following table presents the operating lease cost and information related to the operating lease right-of-use assets, net and operating lease liabilities for the quarter ended June 30, 2024 (in thousands):


	Three Months Ended
	June 30, 2024
Lease Cost
Operating lease cost	$	1,139
Short-term lease cost		26
Sublease income		(181	)
Total lease cost	$	984
Other Information
Operating cash flows used for lease liabilities	$	(1,792	)
Weighted-average remaining lease term - operating leases		5.3
Weighted-average discount rate - operating leases		7	%

For the six months ended June 30, 2024, the Company recognized $2.3 million and less than $0.1 million in operating lease and short-term lease costs, respectively. Additionally, for the six months ended June 30, 2024, the Company recognized $0.4 million in sublease income.