Leases

9 Months Ended

Sep. 30, 2022

(12)

Leases

The Company has an operating lease for approximately 8,000 square feet of office space in a multi-tenant building in Cambridge, Massachusetts, which commenced in February 2018 and goes through June 2024. In August 2022, the Company entered into an additional operating lease (the "August 2022 lease") for approximately 14,000 square feet of office space in a multi-tenant building in Cambridge, Massachusetts through July 2026. Lease expense consisted of operating lease costs of $0.3 million and $0.6 million for the three and nine months ended September 30, 2022, respectively. Rent expense under the prior lease accounting standard was $0.2 million and $0.5 million for the three and nine months ended September 30, 2021, respectively.

In September 2022, the Company entered into a sublease agreement through May 2024 for the approximately 8,000 square feet of office space that it leases in a multi-tenant building in Cambridge, Massachusetts. The Company expects to receive sublease payments of approximately $0.1 million in 2022, $0.6 million in 2023 and $0.3 million in 2024. These expected sublease payments are equal to the fixed payments that the Company is required to make under its lease.

The following table summarizes supplemental cash flow information (in thousands):


	Nine Months Ended September 30, 2022
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	456
ROU asset obtained in exchange for an operating lease liability	$	4,931

The following table summarizes the Company’s future minimum lease payments and reconciliation of lease liabilities (in thousands):


	September 30, 2022
Remainder of 2022 (1)	$	(196	)
2023		1,881
2024		1,738
2025		1,461
2026		872
Total future minimum lease payments		5,756
Less: imputed interest		(1,068	)
Total lease liabilities at present value	$	4,688
Lease liabilities, current	$	696
Lease liabilities, non-current	$	3,992

(1)

The Company's negative future lease payments for the remainder of 2022 represent a net cash inflow, which includes required lease payments in the fourth quarter and $0.3 million to be reimbursed by the lessor for improvements made to the newly leased office space pursuant the terms of the August 2022 lease.

The following table summarizes lease term and discount rate:


	September 30, 2022
Weighted-average remaining lease term (in years)		3.4
Weighted-average discount rate		10.7	%

As the Company’s operating leases did not provide an implicit rate, the Company used its incremental borrowing rate based on the information available in determining the present value of lease payments. The Company’s incremental borrowing rate was based on the term of the lease, the economic environment and reflects the rate the Company would have had to pay to borrow on a secured basis.