Leases

12 Months Ended

Dec. 31, 2021

10. Leases

Cambridgepark Lease

In December 2019, the Company entered into a lease agreement for its new corporate office and laboratory facility (the “Cambridgepark Lease”) in Cambridge, Massachusetts. The Cambridgepark Lease has a term of 10 years, beginning on the rent commencement date which is two months after the lease commencement date. There are no options to extend the lease. The lease commencement date, for accounting purposes, was deemed to be reached as of June 30, 2020.

On June 15, 2021, the Company entered into the first lease amendment (“First Lease Amendment”) and the second lease amendment (“Second Lease Amendment” and, together with the First Lease Amendment, the “Lease Amendments”) with PPF Off 100 Cambridge Park Drive, LLC (the “Landlord”). The Lease Amendments amended the Cambridgepark Lease with the Landlord in Cambridge, Massachusetts to add additional leased space in the same building (the “Amended Cambridgepark Lease”).

The First Lease Amendment expanded the amount of space leased by the Company by an additional 10,262 square feet in exchange for aggregate total fixed rent payments of approximately $8.2 million with the annual fixed rental payments escalating from $0.9 million to $1.1 million during the term. The First Lease Amendment commenced during the first quarter of 2022.

The Second Lease Amendment expands the amount of space leased by the Company by an additional 30,175 square feet in exchange for aggregate total fixed rent payments of approximately $21.9 million with the annual fixed rental payments escalating from $1.2 million to $3.0 million during the term. The Second Lease Amendment’s term is expected to commence during the second quarter of 2022.

Payments associated with the Amended Cambridgepark Lease include fixed and variable payments. Variable payments relate to the Company’s share of the Landlord’s operating costs associated with the underlying assets and are recognized when the event on which those payments are assessed. The Amended Cambridgepark Lease does not contain a residual value guarantee. The Lease Amendments term end dates are coterminous with the Cambridgepark Lease.

In conjunction with the Amended Cambridgepark Lease, the Company was required to establish a $2.4 million irrevocable standby letter of credit for the benefit of the Landlord, which has been secured by money market investments and is presented as restricted cash equivalents.

The elements of lease expense were as follows:


	Year Ended December 31,
(in thousands)	2021		2020
Operating lease cost	$	3,017	$	1,780
Short-term lease cost		52		309
Variable lease cost		1,099		235
Total lease cost	$	4,168	$	2,324

Amounts reported in the consolidated balance sheets and the weight-average lease term and discount rate information were as follows:


(in thousands except weighted-average amounts)	December 31, 2021			December 31, 2020
Assets
Operating right-of-use assets	$	15,670		$	17,117
Liabilities
Operating lease liabilities, current	$	1,839		$	863
Operating lease liabilities, non-current	$	16,174		$	17,430
Total lease liabilities	$	18,013		$	18,293
Weighted Average Lease Term and Discount Rate
Weighted-average remaining lease term (years)	8.64			9.55
Weighted-average discount rate		9.4	%		9.4	%

The following table represents other lease activity:


	Year Ended December 31,
(in thousands)	2021		2020
Cash Flow Information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	2,559	$	703
Right-of-use assets obtained in exchange for lease obligations	$	35	$	17,899

Future lease payments for noncancelable leases as of were as follows:


(in thousands)	December 31, 2021 (1)
2022	$	3,410
2023		2,718
2024		2,799
2025		2,883
2026		2,970
Thereafter		11,665
Total lease payments	$	26,445
Less: imputed interest		(8,432	)
Present value of lease liabilities	$	18,013

(1)

Excluded from the table above are a portion of the Company's lease payments associated with the Lease Amendments, as the space leased has not commenced for accounting purposes as of December 31, 2021. The commencement date is the date on which the asset is made available to the Company by the lessor.