|6 Months Ended|
Jun. 30, 2023
The Company determines whether an arrangement is or contains a lease based on the unique facts and circumstances present at the inception of an arrangement. The Company leases office and laboratory space under operating leases that have a weighted average remaining term of 2 years as of June 30, 2023. The Company also leases office space under short-term leases that provide for either party to terminate the lease without cause and with 30 days’ notice. The Company’s operating leases include rent escalations and are subject to additional variable charges, including common area maintenance, property taxes and property insurance. Given the variable nature of such costs, they are recognized as expense as incurred. Additionally, some of the Company’s leases are subject to certain fixed fees which the Company has determined to be non-lease components. The Company has elected the practical expedient to account for lease and non-lease components as a single-lease component and has included fixed payments related to non-lease components in calculating the operating lease liability.
The weighted average discount rate for the Company’s operating leases as of June 30, 2023 is 8.3%, representing the Company's incremental borrowing rate at the beginning of each lease. For the six months ended June 30, 2023, total lease cost was $1,458, consisting of $1,113 operating lease cost, $34 of variable lease costs and $311 of short-term lease cost. Cash paid for amounts included in the measurement of operating lease liabilities was $1,139 for the six months ended June 30, 2023. Rent expense for the six months ended June 30, 2022 was $578.
Future lease payments under the non-cancelable operating leases as of June 30, 2023 are as follows:
In January 2021, the Company entered into the WuXi Agreement, which included a dedicated manufacturing suite to be used for the Company’s cell processing manufacturing for its MusCAARTesTM trial. The Company concluded the WuXi Agreement had an embedded lease. In August 2022, the Company's dedicated suite arrangement was converted into a shared suite arrangement. The Company concluded the WuXi Agreement no longer contained an embedded lease and recognized a gain on derecognition of this lease asset and liability of $149 for the year ended December 31, 2022.
The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef