Leases

9 Months Ended

Sep. 30, 2021

Leasesof Lessor Disclosure [Abstract]

LEASES

NOTE 5 – LEASES

Operating leases

In December 2020, the Company entered into an agreement to lease approximately 10.3 square feet of office space in New York, New York (“Office Lease”), which commenced in April 2021. The office space is owned by an affiliate of Deerfield Management Company, L.P., which together with its affiliates beneficially owned more than 5% of the Company’s voting securities at the time the lease was executed. Management determined that the lease terms were on an arms-length basis. Annual rent is approximately $1,117. The Office Lease has a term of approximately seven years, commenced on April 2, 2021, and contains provisions for a free-rent period, annual rent increases, and an allowance for tenant improvements. The Company is responsible for real estate taxes, maintenance, and other operating expenses applicable to the leased premises. The landlord was deemed to be the accounting owner of the tenant improvements, which were not material for the Office Lease. In conjunction with the Office Lease, the Company established a letter of credit of approximately $745 secured by cash balances included in restricted cash. Variable lease expenses based on our portion of the operating expenses, including real estate taxes and insurance, are recorded as a period expense when incurred. The Company has an option to extend the term by five years, however, the Company determined at the lease commencement date that it was not reasonably certain to exercise the renewal option and such renewal was excluded from the operating lease right-of-use (“ROU”) asset and operating lease liability recorded for this lease.

In June 2021, the Company amended the existing agreement with its Contract Development and Manufacturing Organization (“CDMO”), establishing a term of eight-years from the amendment date. These lease terms apply to the leased spaces which prior to the amendment, were leased under a quarter-to quarter arrangement.

Leases classified as operating leases are included in operating lease ROU assets, current operating lease liabilities and non-current operating lease liabilities in the Company’s condensed consolidated balance sheets. The operating lease ROU assets and operating lease liabilities represents the Office Lease and the CDMO leased spaces. Cash paid for operating lease liabilities was $707 and $61 during the nine months ended September 30, 2021 and 2020, respectively, which is included in operating cash flows. The ROU asset obtained in exchange for operating lease liabilities related to the Office Lease was $6,549.

Supplemental balance sheet information related to the Company’s leases was as followed:

	As of
Operating leases:	September 30, 2021		December 31, 2020
Operating ROU assets	$	7,413	$	1,060
Operating lease liability, current	$	840	$	88
Operating lease liability, non-current	$	6,603	$	999

The components of lease expense for the three and nine months ended September 30, 2021 and 2020 were as follows:

	For the three months ended September 30,				For the nine months ended September 30,
Lease cost	2021		2020		2021		2020
Operating lease cost	$	367	$	21	$	712	$	61
Short-term lease cost		4		3		92		151
Total	$	371	$	24	$	804	$	212

Variable lease expense for the three and nine months ended September 30, 2021 were not material. The Company did not incur variable lease expense for the three and nine months ended September 30, 2020.

The weighted average remaining lease term and the weighted average discount rate for operating leases were:

	As of September 30, 2021			As of December 31, 2020
Weighted-average discount rate		7.0	%		12.0	%
Weighted-average remaining lease term – operating lease (in months)		82			87

As of September 30, 2021, the expected annual minimum lease payments of the Company’s operating lease liabilities were as follows:

For Years Ending December 31,	Operating lease
2021 (excluding the nine months ended September 30, 2021)	$	332
2022		1,327
2023		1,327
2024		1,327
2025		1,395
Thereafter		3,664
Total operating lease payments		9,372
Less: imputed interest		1,929
Present value of future minimum lease payments	$	7,443