The Company has contractual arrangements with research and development organizations and suppliers; however, these contracts are generally cancelable on 30-60 days’ notice and the obligations under these contracts are largely based on services performed. The Company may also enter into contracts in the normal course of business with clinical research organizations for clinical trials, with contract manufacturing organizations for clinical supplies and with other vendors for preclinical studies, supplies and other services and products for operating purposes. These contracts generally provide for termination on notice. As of June 30, 2022 and December 31, 2021, there were no amounts accrued related to termination charges.

The Company has entered into a Biologics Master Services Agreement with WuXi Biologics (Hong Kong) Limited ("WuXi") (the "WuXi Agreement"). The WuXi Agreement includes the terms and conditions under which WuXi will coordinate the Company’s biologics development and manufacturing services. Pursuant to the WuXi Agreement, the Company may be required to pay WuXi a royalty percentage or a one-time milestone payment on global net sales of third-party manufactured products at the Company’s election. The royalty or one-time milestone payment is only payable if the Company does not use WuXi as the manufacturer in part, or in totality. As of June 30, 2022 and December 31, 2021, there are no minimum commitments under the WuXi Agreement. Additionally, as of June 30, 2022 and December 31, 2021, there are no royalties or milestones payable.

The Company identified and assessed the following estimates in recognizing the operating lease right of use assets and corresponding liabilities.

Expected lease term: The expected lease term includes non-cancelable lease periods and, when applicable, periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option, as well as periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option.

Incremental borrowing rate: As the discount rates in the Company’s lease are not implicit, management estimated the incremental borrowing rate based on the rate of interest the Company would have to pay to borrow a similar amount on a collateralized basis over a similar term.

Lease and non-lease components: The Company is required to pay fees for operating expenses in addition to monthly base rent for certain operating leases ("non-lease components"). The Company has not elected the practical

expedient which allows non-lease components to be combined with lease components for all asset classes. Variable non-lease components are not included within the lease right-of-use asset and lease liability on the condensed consolidated balance sheet, and instead are reflected as expense in the period they are paid.

Rent expense was $0.3 million and $0.1 million for the three months ended June 30, 2022 and 2021, and $0.6 million and $0.3 million for the six months ended June 30, 2022 and 2021.

The following table summarizes lease terms and discount rate:


	June 30, 2022			December 31, 2021
Weighted-average remaining lease term (years)	5.4			5.9
Weighted-average discount rate		4.78	%		4.76	%

The following table summarizes the cash flow and other information:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Operating lease liabilities arising from obtaining right-of-use assets (non-cash)	$	—	$	110	$	177	$	3,316
Operating cash flows used in operating leases	$	234	$	189	$	484	$	374

As of June 30, 2022, the Company had the following future minimum lease payments under non-cancelable operating leases for the remainder of 2022 and the future years thereafter (in thousands):


Year ending December 31:
2022	$	503
2023		999
2024		982
2025		952
2026		924
Thereafter		1,197
Total lease payments		5,557
Less: interest		(750	)
Total lease liability	$	4,807
Lease liabilities	$	778
Lease liabilities, net of current portion	$	4,029

In March 2019, the Company provided a letter of credit for approximately $57,000 to secure its obligation under its lease in Cambridge, Massachusetts. In November 2021, the Company provided a letter of credit for approximately $142,000 to secure its obligation under its lease in Watertown, Massachusetts. The Company maintains that amount of cash on hand (restricted) to fund any necessary draws on the letter of credit. In addition, as of June 30, 2022 and December 31, 2021, the Company had approximately $91,000 and $99,000 on hand serving as a guarantee for its lease obligation in Belgium. These amounts have been classified as restricted cash in the condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021.