Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.21.2
Leases
6 Months Ended
Jun. 30, 2021
Leases  
Leases

13. Leases

Effective January 1, 2019, the Company adopted ASC 842 using the optional transition method, applying no practical expedients. In accordance with the optional transition method, the Company did not recast the prior period consolidated financial statements. The lease term is the noncancelable period of the lease. There are no termination provisions or renewal periods reasonably certain of exercise or options controlled by the lessor.

The Company conducts its operations from leased facilities in Morrisville, North Carolina, San Antonio, Texas and New Brunswick, New Jersey, the leases for which will expire in 2027, 2023 and 2022, respectively. The leases are for general office space and lab space and require the Company to pay property taxes, insurance, common area expenses and maintenance costs.

In June 2021, the Company entered into a lease agreement with Durham KTP Tech 7, LLC, to lease a 15,996 square foot facility in Morrisville, North Carolina to expand its research and development activities. The lease has a term of eight years following the commencement date and provides the Company the option to extend the lease term for one five year term. It is subject to fixed rate escalation increases and also provides up to $2.4 million for tenant improvements. As the lease had not commenced as of June 30, 2021, the Company has not recorded an operating lease ROU asset or lease liability for this lease in the accompanying condensed consolidated balance sheets. The initial estimate of the minimum amount of undiscounted lease payments due under this lease is $4.7 million. Further, the tabular disclosure of minimum lease payments below does not include payments due under this lease.

Total cash paid for operating leases during the three and six months ended June 30, 2021 was $0.09 million and $0.18 million respectively, and is included within cash flows from operating activities within the consolidated statement of cash flows.

The Company leases furniture and specialized lab equipment under finance leases. The related right-of-use assets are amortized on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset. The effective interest rate is 6.17%.

The Company’s lease cost is reflected in the accompanying statements of operations and comprehensive loss as follows:

For the Three Months Ended June 30, 2021

For the Six Months Ended June 30, 2021

Operating lease cost

$

113,555

$

227,111

Finance lease cost

Amortization of lease assets

29,725

59,450

Interest on lease liabilities

3,345

7,087

Total finance lease cost

$

33,070

$

66,537

The weighted average remaining lease term and incremental borrowing rate as of June 30, 2021 were as follows:

Weighted average remaining lease term

Operating leases

5.7

years

Finance leases

1.8

years

Weighted average discount rate

Operating leases

6.47

%

Finance leases

6.00

%

Maturities of operating and finance lease liabilities as of June 30, 2021 were as follows:

Operating Leases

    

Finance Leases

    

Total

2021 (excluding the six months ended June 30, 2021)

$

186,181

$

60,342

$

246,523

2022

360,839

155,694

516,533

2023

244,973

10,284

255,257

2024

231,503

-

231,503

2025

238,452

-

238,452

2026

245,607

-

245,607

Thereafter

209,214

-

209,214

Total minimum lease payments

1,716,769

226,320

1,943,089

Less: imputed interest

(271,657)

(11,209)

(282,866)

Present value of lease liabilities

$

1,445,112

$

215,111

$

1,660,223