As of March 31, 2023, the Company leases office and laboratory facilities under operating leases, which expire at various dates through 2027. The Company has $678 thousand in letters of credit outstanding as security on certain of these leases. As part of its adoption of ASC 842, the Company recorded operating right-of-use assets and operating lease liabilities for these leases as of January 1, 2022.

The Company entered into an operating sublease agreement on January 18, 2023 (the "Sublease") with respect to part of its existing Boston office and laboratory facilities (the "Head Lease"). The Company accounted for the Head Lease and the Sublease as separate contracts and there was no effect on the right-of-use asset or lease liability associated with the Head Lease. The Sublease is long-term and has an effective end date of more than one year from March 31, 2023. The Head Lease rent expense is presented separately from income related to the Sublease and both are reported as components of operating expenses on the condensed consolidated statements of operations and comprehensive loss. The Company recorded $55 thousand of income related to the Sublease for the three months ended March 31, 2023.

The Company leases research equipment and furniture under finance leases. The following table contains a summary of the lease costs recognized under ASC 842 pertaining to the Company’s finance and operating leases for the three months ended March 31, 2023 (in thousands):


	Three Months Ended March 31,
	2023
Lease Cost:
Amortization of finance right-of-use assets	$	197
Interest on finance lease liabilities		42
Operating lease cost		420
Variable lease cost		158
Total lease costs	$	817
Operating Sublease income		(55	)
Total lease costs, net	$	762

The following table contains a summary of other information pertaining to the Company’s finance and operating leases for the three months ended March 31, 2023 (in thousands, except lease term and discount rate):


	Three Months Ended March 31,
	2023
Other Operating Lease Information:
Operating cash flows for operating leases	$	410
Operating cash flows for operating subleases	$	(22	)
Operating cash flows for finance leases	$	42
Financing cash flows from finance leases	$	186

Weighted average remaining lease term
Operating leases	3.4 years
Financing leases	2.8 years

Weighted average discount rate
Operating leases	7.7%
Financing leases	8.2%

The following table presents supplemental balance sheet information related to operating and financing leases as of March 31, 2023 (in thousands):


	March 31, 2023
Operating leases
Right-of-use assets, net	$	5,297

Right-of-use lease liabilities, current	$	1,406
Right-of-use lease liabilities, noncurrent		4,119
Total operating lease liabilities	$	5,525

Financing leases
Right-of-use assets, net	$	2,133

Right-of-use lease liabilities, current	$	879
Right-of-use lease liabilities, noncurrent		1,347
Total financing lease liabilities	$	2,226

The following table presents the maturity of the Company’s operating and finance lease liabilities as of March 31, 2023 (in thousands):


	Operating		Financing
2023	$	1,323	$	681
2024		1,780		908
2025		1,724		758
2026		1,413		107
2027		59		—
Total future minimum lease payments	$	6,299	$	2,454
Less amount representing interest		774		228
Total lease liabilities	$	5,525	$	2,226

In the normal course of business, the Company enters into licensing agreements with various parties to obtain the right to make, use, and sell licensed products currently in development.

The Company records estimated losses from loss contingencies, such as a loss arising from a litigation, when it determines that it is probable a liability has been incurred and the amount of loss can be reasonably estimated. Litigation is subject to many factors that are difficult to predict so that there can be no assurance, in the event of a material unfavorable result in one or more claims, the Company will not incur material costs.

During 2017, the Company became actively involved in a matter pending in the Ontario (Canada) Superior Court of Justice which names, among multiple other defendants, the Company and two former officers of the Company. The claims pending in this matter allege breach of contract by the Company and seek declaratory and other relief, including monetary damages from the Company, and the individual defendants, including the Company’s former officers. The claims by such plaintiffs were originally made in a lawsuit filed in Ontario during October 2011, but was not pursued by such plaintiffs in any material manner until 2017. The Company believes that there is no merit to the claims alleged against the Company and its former officers, including no alleged breach of contract by the Company, and intends to vigorously defend against the claims pertaining to the Company and its former officers. At the present stage of the suit, management believes the outcome in this matter is not likely to have any material impact on the Company’s results, cash flows, or financial position.