XML 24 R13.htm IDEA: XBRL DOCUMENT v3.21.2
Leases
9 Months Ended
Sep. 30, 2021
Leases [Abstract]  
Leases

7.

Leases

On May 17, 2018, the Company amended the lease for its headquarters in Watertown, Massachusetts. The original five-year lease for approximately 13,650 square feet of combined office and laboratory space was set to expire in April 2019. Under the amendment, the Company leased an additional 6,590 square feet of rentable area of the building, with a commencement date of September 10, 2018. The amendment extended the term of the lease for the combined space through May 31, 2025, and the landlord provided the Company a construction allowance of up to $670,750 to be applied toward renovations and improvements within the total space. On April 5, 2021, the Company further amended the lease to include an additional 1,409 square feet of rentable area of the building through May 31, 2025, with a commencement date of July 1, 2021. The Company has an option to further extend the term of the lease for one additional five-year period. Per the terms of the lease agreement, the Company does not have a residual value guarantee. The Company previously provided a cash-collateralized $150,000 irrevocable standby letter of credit as security for the Company’s obligations under the lease, which was extended through the period that is four months beyond the expiration date of the amended lease. The Company will also be required to pay its proportionate share of certain operating costs and property taxes applicable to the leased premises in excess of new base year amounts.

In July 2017, the Company leased approximately 3,000 square feet of office space in Basking Ridge, New Jersey under a lease term extending through June 2022, with two five-year renewal options at 95% of the then-prevailing market rates. In addition to base rent, the Company is obligated to pay its proportionate share of building operating expenses and real estate taxes in excess of base year amounts. In June 2018, the Company subleased an additional 1,381 square feet of adjoining space from Caladrius Biosciences, Inc. (“Caladrius”) through May 2022. The Chief Executive Officer of Caladrius was a director of the Company through June 2020. Per the terms of the lease and sublease agreements, the Company does not have any residual value guarantees.

The Company identified and assessed the following significant assumptions in recognizing its right-of-use (“ROU”) assets and corresponding lease liabilities:

 

As the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in calculating the present value of the lease payments. The Company utilized the borrowing rate under its existing 5-year term loan facility (see Note 8) as the discount rate.

 

Since the Company elected to account for each lease component and its associated non-lease components as a single combined component, all contract consideration was allocated to the combined lease component.

 

The expected lease terms include noncancelable lease periods. Renewal option periods have not been included in the determination of the lease terms as they are not deemed reasonably certain of exercise.

 

Variable lease payments, such as common area maintenance, real estate taxes and property insurance are not included in the determination of the lease’s ROU asset or lease liability.

As of September 30, 2021, the weighted average remaining term of the Company’s operating leases was 3.6 years and the lease liabilities arising from obtaining ROU assets reflect a weighted average discount rate of 12.48%.

 

 

Supplemental balance sheet information related to operating leases as of September 30, 2021 and December 31, 2020 are as follows (in thousands):

 

 

September 30,

 

 

December 31,

 

 

2021

 

 

2020

 

Other current liabilities - operating lease current portion

$

649

 

 

$

568

 

Operating lease liabilities – noncurrent portion

 

2,019

 

 

 

2,330

 

Total operating lease liabilities

$

2,668

 

 

$

2,898

 

 

Operating lease expense recognized related to ROU assets was $229,000 and $213,000, excluding $9,000 of variable lease costs, for each of the three months ended September 30, 2021 and 2020, and $656,000 and $640,000 related to ROU assets, excluding $27,000 of variable lease costs, during each of the nine months ended September 30, 2021 and 2020, and were included in general and administrative expense in the Company’s statement of comprehensive loss. Cash paid for amounts included in the measurement of operating lease liabilities was $236,000 and $216,000 for the three months ended September 30, 2021 and 2020, respectively, and $678,000 and $646,000 for the nine months ended September 30, 2021 and 2020, respectively.

 

The Company is a party to three finance leases for laboratory equipment. The equipment leases expire in December 2021, December 2022 and June 2023, respectively.

 

Supplemental balance sheet information related to the finance leases as of September 30, 2021 and December 31, 2020 are as follows (in thousands):

 

 

September 30,

 

 

December 31,

 

 

2021

 

 

2020

 

Property and equipment, at cost

$

371

 

 

$

239

 

Accumulated amortization

 

(161

)

 

 

(52

)

Property and equipment, net

$

210

 

 

$

187

 

 

 

 

 

 

 

 

 

Other current liabilities finance lease current portion

$

147

 

 

$

119

 

Other long-term liabilities

 

70

 

 

 

71

 

Total finance lease liabilities

$

217

 

 

$

190

 

 

The components of finance lease expense recognized during the three and nine months ended September 30, 2021 related to ROU assets were $46,000 and $108,000 and interest on lease liabilities was $7,000 and $17,000. Cash paid for amounts included in the measurement of finance lease liabilities were operating cash flows of $7,000 and $17,000 during the three and nine months ended September 30, 2021, respectively, and financing cash flows of $45,000 and $102,000 during the three and nine months ended September 30, 2021, respectively. The components of finance lease expense recognized during the three and nine months ended September 30, 2020 related to ROU assets were $13,000 and $39,000, respectively. Interest on lease liabilities were $2,000 and $7,000, respectively, during the three and nine months ended September 30, 2020. Cash paid for amounts included in the measurement of finance lease liabilities were operating cash flows of $2,000 and $7,000 during the three and nine months ended September 30, 2020, and financing cash flows of $15,000 and $35,000 during the three and nine months ended September 30, 2020.

 

As of September 30, 2021, the weighted average remaining term of the Company’s finance lease was 1.4 years and the lease liabilities arising from obtaining ROU assets reflect a weighted average discount rate of 12.5%.

The Company’s total future minimum lease payments under non-cancellable leases at September 30, 2021 were as follows (in thousands):

 

 

Operating Leases

 

 

Finance Leases

 

Remainder of 2021

$

241

 

 

$

50

 

2022

 

911

 

 

 

149

 

2023

 

877

 

 

 

37

 

2024

 

894

 

 

 

 

2025

 

373

 

 

 

 

Total lease payments

$

3,296

 

 

$

236

 

Less imputed interest

 

(628

)

 

 

(19

)

Total

$

2,668

 

 

$

217