7. Commitments and Contingencies

Operating Leases

620 Memorial Facility Lease

In March 2015, the Company entered into a 5‑year facility lease for its corporate headquarters (the ‘‘lease’’) at 620 Memorial Drive in Cambridge, Massachusetts. The lease was amended in February 2018, to add an additional space (the ‘‘expansion space’’) at the current location and to extend the lease term (the ‘‘amended lease’’). The amended lease expires in September 2023. Rent for the facility lease, including the expansion space, increases from $1.4 million a year to $1.7 million a year over the term of the lease. Variable lease payments include the Company’s allocated share of costs incurred and expenditures made by the landlord in the operation and management of the building. The Company has the option to extend the term of the amended lease for one additional term of 5 years commencing after the amended lease expires.

Other information related to the Company’s lease is as follows (in thousands, except lease term and discount rate):


	For Three Months Ended
	March 31,
	2020
Lease Cost:
Operating lease cost	$	344
Variable lease cost		168
Total lease cost	$	512


	For Three Months Ended
	March 31,
	2020
Other information:
Operating cash flows used for operating leases	$	353
Weighted average remaining lease term		3.5 years
Weighted average incremental borrowing rate		6.47	%

The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of March 31, 2020 (in thousands):


Year Ending December 31,
2020 (excluding the three months ended March 31, 2020)	$	1,093
2021		1,619
2022		1,668
2023		1,279
Total lease payments		5,659
Less imputed interest		(624)
Total operating lease liabilities	$	5,035

301 Binney Facility Lease

In November 2019, the Company entered into a facility lease at 301 Binney Street in Cambridge, Massachusetts to be used as its new corporate headquarters. The expiration date of the lease is in August 2025 and the Company has the option to extend the term by two years. The base rent is $6.9 million per year, subject to an increase of 3.5%, and the Company is subject to a free-rent period through mid-August 2020. Variable lease payments include the Company’s allocated share of costs incurred and expenditures made by the landlord in the operation and management of the building. The Company is involved in the construction and design of the space and anticipates that it will incur construction costs, subject to an allowance for tenant improvements of up to $14.1 million. In connection with the facility lease, the Company has secured a letter of credit for $2.3 million which renews automatically each year. The lease commencement date, for accounting purposes, was not reached as of March 31, 2020 and therefore the lease is not included in the Company’s operating lease right-of-use asset or operating lease liabilities as of March 31, 2020.

Specifica Antibody Library

On December 20, 2019 (the “Effective Date”), the Company entered into a Library Development and Transfer Agreement with Specifica Inc. (“Specifica”), whereby Specifica is responsible for developing and delivering a customized antibody display library (the “Library”) for the Company to use to identify antibodies for further research, development, and commercialization. The Company will pay $3.7 million in fees through 2023 related to the Library.

Legal Proceedings

The Company, from time to time, may be party to litigation arising in the ordinary course of its business. The Company was not subject to any material legal proceedings during the three months ended March 31, 2020 and 2019.