Commitments and Contingences

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

9. Commitments and Contingencies

Operating Leases

The Company leases office and laboratory space in Redwood City, CA, and Boston, MA.

On June 16, 2022, Adicet Therapeutics entered into a second lease amendment with Westport Office Park, LLC (the Second Amendment). The Second Amendment further amends the lease agreement, dated as of October 31, 2018, as amended on December 30, 2020, for the premises located at 1000 Bridge Parkway in Redwood City, CA. The Second Amendment expands the space leased by Adicet Therapeutics at 1000 Bridge Parkway to include a portion of 1200 Bridge Parkway, increasing Adicet Therapeutics’ leased space by 12,204 square feet (the Expansion Space). Adicet Therapeutics will pay a monthly fee for the Expansion Space increasing annually from $73,000 to $78,000 over the thirty-six (36) month term of the Second Amendment. The Second Amendment also provides Adicet Therapeutics with an allowance to construct improvements to the Expansion Space. The initial right-of-use asset and operating lease liability for 1200 Bridge Parkway at lease commencement was $2.3 million.

The following table presents the operating lease cost and information related to the operating lease right-of-use assets, net and operating lease liabilities for the quarter ended June 30, 2022 (in thousands):


	Three months ended
	June 30, 2022
Lease Cost
Operating lease cost	$	1,040
Short-term lease cost		143
Variable lease cost		—
Sublease Income		(175	)
Total lease cost	$	1,008
Other Information
Operating cash flows used for lease liabilities	$	902
Weighted-average remaining lease term - operating leases		6.9
Weighted-average discount rate - operating leases		7.1	%

For the six months ended June 30, 2022, the Company recognized $2.0 million and $0.3 million in operating lease and short-term lease costs, respectively. Additionally, for the six months ended June 30, 2022, the Company recognized $0.3 million in sublease income.

On July 19, 2021, the Company entered into a Sublease (the Sublease Agreement) with RFS OPCO LLC (Sublessee), whereby the Company agreed to sublease to Sublessee all of the 9,501 rentable square feet of office space in Boston, MA, currently leased by the Company pursuant to the Company’s lease with 500 Boylston and 222 Berkeley Owner (DE) LLC, dated January 8, 2018, as amended (the Master Lease). The term of the sublease started on September 1, 2021 and ends on July 30, 2026. The aggregate base rent due to the Company under the Sublease is approximately $3.5 million which began on October 1, 2021. Upon execution of the Sublease Agreement, the Company received a cash security deposit of $0.1 million from the Sublessee which is recorded as other non-current liabilities in the consolidated balance sheets. The expected sublease income as of June 30, 2022 is as follows (in thousands):


	June 30, 2022
2022	$	328
2023		671
2024		685
2025		699
2026		416
Total	$	2,799

Further, the Company remains liable for the remaining lease payments under the Master Lease, totaling $2.6 million, which is included in future minimum lease payments table below.

The future minimum lease payments under all non-cancelable operating lease obligations as of June 30, 2022 were as follows (in thousands):


	June 30, 2022
2022	$	2,119
2023		4,298
2024		4,395
2025		4,028
2026 and thereafter		13,747
Total undiscounted lease payments		28,587
Less: imputed interest		6,202
Total operating lease liability		22,385
Less: current portion		2,261
Operating lease liability, net of current maturities	$	20,124