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Leases
3 Months Ended
Mar. 31, 2023
Disclosure Text Block  
Leases

7. Leases

The Company’s lease portfolio for the three months ended March 31, 2023 includes: an office lease for its current headquarters location, vehicle leases for its salesforce representatives, and leases for computer and office equipment.

The Company’s office lease and vehicle lease require letters of credit to secure the Company’s obligations under the lease agreements totaling $1.7 million and are collateralized by money market accounts recorded as restricted cash on the Company’s condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022.

Lease cost is recognized on a straight-line basis over the lease term. The components of lease cost for the three months ended March 31, 2023 and 2022 are as follows (in thousands):

Three Months Ended

March 31, 

2023

2022

Operating lease cost

$

627

$

628

Short-term lease cost

271

260

Total lease cost

$

898

$

888

Supplemental information related to leases for the periods reported is as follows:

Three Months Ended

March 31, 

2023

2022

Cash paid for amounts included in the measurement of lease liabilities (in thousands)

$

757

$

789

Weighted-average remaining lease term of operating leases (in years)

7.2

8.1

Weighted-average discount rate of operating leases

5.8

%

5.8

%

 

Summer Street Lease

In June 2019, the Company entered into a non-cancelable operating lease (the “Summer Street Lease”) for approximately 39,000 square feet of office space on the 23rd floor of 100 Summer Street, Boston, Massachusetts, which began serving as the Company’s headquarters in October 2019. The Summer Street Lease terminates on June 11, 2030 and includes a 2% annual rent escalation, free rent periods, a tenant improvement allowance, and an option to extend the term of the lease for an additional five years at a market base rental rate. The extension option is not included in the lease term used for the measurement of the lease, as it is not reasonably certain to be exercised. The lease expense, inclusive of the escalating rent payments and lease incentives, is recognized on a straight-line basis over the lease term.

At lease commencement, the Company recorded a right-of-use asset and a lease liability using an incremental borrowing rate of 5.8%. At March 31, 2023, the balances of the right-of-use asset and operating lease liability were $13.7 million and $19.2 million, respectively. At December 31, 2022, the balances of the right-of-use asset and operating lease liability were $14.0 million and $19.7 million, respectively.

Lease costs recorded during each of the three months ended March 31, 2023 and 2022 were $0.6 million.

Future minimum lease payments as of March 31, 2023 are as follows (in thousands):

2023(1)

$

2,309

2024

3,126

2025

3,189

2026

 

3,252

2027

3,317

2028 and thereafter

 

8,285

Total future minimum lease payments

23,478

Less: present value adjustment

(4,293)

Operating lease liabilities

19,185

Less: current portion of operating lease liabilities

(3,080)

Operating lease liabilities, net of current portion

$

16,105

(1) For the nine months ending December 31, 2023.