Leases |
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Leases | 7. Leases On July 19, 2021, the Company entered into a lease agreement for office space in Cambridge, Massachusetts, on a month-to-month basis, which was determined to be a short-term lease as the Company was not reasonably certain to extend the lease beyond twelve months. The Company recognizes lease payments as incurred over the lease term, and recognized short-term lease expense of $0.2 million for the nine months ended September 30, 2022. On September 16, 2021, the Company entered into an operating lease agreement for 7,351 rentable square feet of office space located in Cambridge, Massachusetts. The premises required additional build-out at the time the lease agreement was entered into. The lease commenced in March 2022 when the space was made available for use. Upon lease commencement, the Company recorded a ROU asset of $4.7 million and a corresponding lease liability of $4.7 million. The lease has a term of 7 years and an expiration date of March 22, 2029, with lease payments made on a monthly basis. The initial annual base rent is approximately $0.8 million, subject to a 3% annual rent increase, plus an allocation of the Company’s proportionate share of building operating costs such as maintenance, utilities, and insurance that are treated as variable costs and excluded from the measurement of the lease. The Company is entitled to one option to extend the lease term for an additional period of five years. The option to extend the lease term is not reflected in the ROU asset and lease liability as it is not reasonably certain of being exercised. Pursuant to the terms of the lease, the Company provided a security deposit in the form of a letter of credit in the amount of approximately $0.4 million upon signing, which is recognized as restricted cash within other assets on the condensed consolidated balance sheets. As of September 30, 2022, the weighted-average remaining lease term was 6.5 years, and the weighted-average discount rate was 9.1%. The following table presents future lease payments under the terms of the Company’s operating leases as of September 30, 2022, including a reconciliation to the present value of operating lease liabilities recognized in the condensed consolidated balance sheet (in thousands):
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