On January 1, 2022, the Company adopted ASC 842 using the modified retrospective transition approach allowed under ASU 2018-11 which releases companies from presenting comparative periods and related disclosures under ASC 842 and requires a cumulative-effect adjustment to the opening balance of accumulated deficit in the period of adoption (Note 2). The Company had an immaterial cumulative-effect adjustment to the opening balance of accumulated deficit as of January 1, 2022. The Company is party to three operating leases for laboratory and office space. The Company’s finance leases are immaterial both individually and in the aggregate. The Company has elected to apply the short-term lease exception to all leases of one year or less. As of June 30, 2022, this exception applies to one operating lease for office and laboratory space in Denmark that expires December 31, 2022 and another operating lease for office space in the UK that is payable month to month. Further, the Company has applied the guidance in ASC 842 to our corporate office and laboratory leases and has determined that these should be classified as operating leases. Consequently, as a result of the adoption of ASC 842, we recognized a right-of-use (ROU) lease asset of approximately $2.3 million with a corresponding lease liability of approximately $2.4 million based on the present value of the minimum rental payments of such leases. In accordance with ASC 842, the beginning balance of the ROU lease asset was reduced by the existing deferred rent liability at inception of approximately $59,000. In the consolidated balance sheet at June 30, 2022, the Company has a ROU asset balance of $2.1 million and a current and non-current lease liability of $0.4 million and $1.9 million, respectively, relating to the ROU lease asset. The balance of both the ROU lease asset and the lease liabilities primarily consists of future payments under the Company’s office leased in New York, NY, Rockville, MD and Copenhagen, Denmark.

The Company is party to an operating lease in Copenhagen, Denmark for office and laboratory space that commenced in March 2021 with the initial term set to expire in January 2025. Base rent for this lease is approximately $92,000 annually. The Company is party to an operating lease in New York, NY for office and laboratory space that commenced in October 2021 with the initial term set to expire in January 2027. Base rent for this lease is approximately $222,000 annually. The Company is party to an operating lease in Rockwell, MD for office and laboratory space that commenced in December 2021 with the initial term set to expire in April 2027. Base rent for this lease is approximately $273,000 annually. Additionally, the Company is party to an operating lease in the UK that has month-to-month payments of approximately $900 per month. Rent expense for the three months ended June 30, 2022 and 2021 was $0.2 million and $0.1 million, respectively. Rent expense for the six months ended June 30, 2022 and 2021 was $0.4 million and $0.1 million, respectively.

Quantitative information regarding the Company’s leases for the six months ended June 30, 2022 is as follows (in thousands):


	Three months ended			Six Months Ended
Lease Cost	June 30, 2022			June 30, 2022
Operating lease cost	$	174		$	348
Other Information
Operating cash flows paid for amounts included in the measurement of lease liabilities	$	56		$	192
Operating lease liabilities arising from obtaining right‑of‑use assets	$	—		$	2,411
Remaining lease term (years)	2.6-4.9			2.6-4.9
Weighted average discount rate		6.5	%		6.5	%

Future lease payments under noncancelable leases are as follows at June 30, 2022 (in thousands):


Future Lease Payments	Amount
2022	$	269
2023		597
2024		614
2025		546
2026		553
Thereafter		150
Total	$	2,729

The Company’s leases do not provide an implicit rate, therefore the Company used its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company used the incremental borrowing rate on January 1, 2022 for operating leases that commenced prior to that date, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.