The Company’s operating lease activity is comprised of non-cancelable facility leases for office and laboratory space in Cambridge, Massachusetts.

The Company has also entered into multiple contract research and contract manufacturing service agreements with third parties which contain embedded leases within the scope of ASC 842. The embedded leases are considered short term leases, as the contractual terms are 12 months or less. Accordingly, no lease liability or ROU asset has been recorded. The Company has recognized $1.0 million and $1.3 million of short term lease costs associated with the embedded leases during the three and six months ended June 30, 2022, respectively. The Company recognized $0.7 million and $1.2 million of short term lease costs associated with the embedded leases during the three and six months ended June 30, 2021, respectively.

The components of operating lease cost were as follows:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2022		2021		2022		2021
Operating lease costs	$	505	$	475	$	1,010	$	924
Variable lease costs		198		154		409		343
Total	$	703	$	629	$	1,419	$	1,267

Supplemental cash flow information related to operating leases was as follows:


	Six months ended June 30,
(in thousands)	2022		2021
Cash paid for amounts included in the measurements of lease liabilities:
Operating cash flows related to operating leases	$	1,058	$	973

As of June 30, 2022, the Company’s operating leases were measured using a weighted-average incremental borrowing rate of 1.57% over a weighted-average remaining lease term of 0.4 years. As of June 30, 2021, the Company’s operating leases were measured using a weighted-average incremental borrowing rate of 4.69% over a weighted-average remaining lease term of 1.1 years.

On August 19, 2021, the Company entered into a lease agreement with ARE-MA Region No. 87 Tenant, LLC, a Delaware limited liability company (the “Landlord”), pursuant to which the Company will lease approximately 104,933 square feet of office and laboratory space located at 201 Brookline Avenue, Boston, Massachusetts (the “Boston Lease”), further amended in January 2022 to include an additional 211 square feet, for a total of 105,144 square feet (the “Premises”). In June 2022, the Company entered into a second amendment to specify separate target commencement dates for certain areas of the Premises. The Premises have not been made available to the Company as of June 30, 2022 and therefore the Boston Lease has not commenced.

The term of the Boston Lease will commence on the earlier of (1) the date the Landlord delivers the Premises to the Company, which the parties expect to be on or prior to August 18, 2022 for the initial premises and October 1, 2022, for the second floor premises, or (2) the date the Landlord could have delivered the Premises but for any delays attributable to the Company (the “Commencement Date”). The Company’s obligation for the payment of base rent for the Premises begins 90 days after the Commencement Date (the “Rent Commencement Date”) and will initially be $0.8 million per month, which will increase by approximately 3% per annum. The Boston Lease has a term of 10 years, measured from the Rent Commencement Date. The Company has the option to extend the term of the Boston Lease for a period of an additional five years. Under the terms of the Boston Lease, the Landlord has agreed to make up to $21.0 million in certain

tenant improvements to the Premises to suit the Company’s use (the “Tenant Improvement Allowance”), which amount is included in the base rent set forth in the Boston Lease. In addition to the Tenant Improvement Allowance, the Company may receive up to $5.2 million for additional improvements to the Premises, which amount is subject to an 8% annual interest charge and may be paid in equal monthly installments.

In connection with its entry into the Boston Lease and as a security deposit, the Company has provided the Landlord a letter of credit in the amount of approximately $4.8 million, which may be reduced to approximately $3.5 million on the expiration of the 36-month anniversary of the Rent Commencement Date so long as there are, and have been, no defaults by the Company under the terms of the Boston Lease. The Company also paid a deposit in the amount of $0.8 million, which is equal to the first month of base rent.

The Landlord has the right to terminate the Boston Lease upon customary events of default. The Company may also terminate the Boston Lease if the Premises are not ready for occupancy within a specified time period after September 1, 2022.

The Boston Lease requires the Landlord to perform a scope of work to build-out the base building prior to the construction of the Premises. The Company concluded the accounting commencement date will occur when the Landlord completes the build-out of the base building and control passes to the Company. The Company will assess the classification of the Boston Lease at the accounting commencement date, and measure the ROU asset and lease liability. Payments made by the Company prior to commencement will be treated as prepaid rent which will increase the ROU asset. As of June 30, 2022 the Company has incurred an aggregate of $6.2 million related to the build out of the Premises prior to the Commencement Date.

In October 2021, the Company entered into a sublease for 11,931 square feet of office and laboratory space in Cambridge, Massachusetts. The sublease commenced in December 2021 and has an initial noncancelable term of 12 months. The Company had the option to extend the sublease for one extension term of three months by written notice not less than six months prior to the expiration of the sublease term. The Company did not exercise this option. Therefore, this sublease is treated as a short term lease. The total fixed lease payments over the sublease term are approximately $1.4 million and the Company is also required to pay its proportional share of operating expenses.

Future minimum commitments under non-cancellable leases as of June 30, 2022 were as follows:


Years ending December 31,	Amount
	(in thousands)
Remainder of 2022	$	2,337
2023		9,691
2024		9,982
2025		10,281
2026		10,590
Thereafter		65,196
Total lease payments	$	108,077
Less: interest		(2	)
Present value of operating lease liabilities	$	108,075

During the three and six months ended June 30, 2022, the Company incurred rent expense of $0.8 million and $1.7 million, respectively. During the three and six months ended June 30, 2021, the Company incurred rent expense of $0.5 million and $0.9 million, respectively.