Annual report pursuant to Section 13 and 15(d)

Leases

v3.22.4
Leases
12 Months Ended
Sep. 30, 2022
Leases  
Leases

9. Leases

In October 2020, the Company entered into a ten-year operating lease agreement with annual escalating rental payments for approximately 14,189 square feet of office and laboratory space in Pittsburgh, PA. The leased premises serves as the Company’s headquarters. The first and second amendments to the lease agreement were executed in December 2020 and April 2021, respectively (collectively with the lease agreement, referred to herein as the “Lease”). In November 2020, the Company prepaid rent of $0.3 million and paid a security deposit of $0.3 million for the Lease. The Lease commenced on May 1, 2021, and the Company was obligated to begin making rental payments on this date. The Company applied the prepaid amount toward the rental payments through December 2021. The Company measured and recognized an initial ROU asset and operating lease liability upon lease commencement. The Company has the right to extend the term of the Lease for an additional five-year term; however, this extension has not been included in the calculation of the lease liability and ROU asset at the lease inception as the exercise of the option was not reasonably certain.

The Company continued to operate under its operating lease in Pittsburgh until the Company moved into its new headquarters and laboratory space, which occurred in June 2021. The Company’s prior office and operating space was leased under operating leases with original terms of less than 12 months, which expired at various dates through November 2021; therefore, the Company’s previous operating leases were not recognized as ROU assets on the consolidated balance sheets. The Company also maintained a short-term rental of office space in San Diego, CA and New York, NY, which expired in November 2021. In October 2021, the Company commenced a one-year lease for the rental of office space in Boston, MA, which was subsequently extended through April 2023.

In August 2021, the Company entered into a two-year finance lease for certain laboratory equipment. The Company measured and recognized an initial ROU asset and finance lease liability upon lease commencement.

In February 2022, the Company entered into an eighteen-month lease agreement for private and shared laboratory facilities for general laboratory and office space in Boston, MA. The Company measured and recognized the ROU asset and operating lease liability upon the lease commencement.

At September 30, 2022, ROU assets and lease liabilities were as follows:

    

As of September 30, 

    

2022

    

2021

Assets:

 

Classification

 

  

 

  

Operating lease right-of-use-asset

 

Operating lease asset

$

5,614,698

$

5,945,295

Financing lease right-of-use-asset

 

Equipment, net

 

103,538

216,490

$

5,718,236

$

6,161,785

Liabilities:

 

  

  

Current

 

Classification

 

  

  

Operating

 

Operating lease liability

$

553,066

$

382,576

Financing

 

Financing lease liability

 

107,632

107,632

Long-term

 

  

  

Operating

 

Long-term portion of operating leases liability

 

5,335,164

5,794,096

Financing

 

Long-term portion of financing leases liability

 

109,500

$

5,995,862

$

6,393,804

The following tables summarize quantitative information about the Company’s leases for the years ended September 30, 2022 and 2021:

    

Year Ended September 30, 

2022

    

2021

Operating cash flows - operating leases

$

901,060

$

128,963

Operating cash flows - financing leases

 

12,252

 

1,376

Financing cash flows - financing leases

 

109,500

 

8,770

Right-of-use asset obtained in exchange for operating lease liabilities

$

164,613

$

6,117,772

Finance lease assets obtained in exchange for finance lease liabilities

 

 

225,902

    

As of September 30, 

2022

    

2021

 

Weighted-average remaining lease term – operating leases (in years)

 

8.74

9.83

Weighted-average discount rate – operating leases

 

7.3

%

7.3

%

Weighted-average remaining lease term – financing leases (in years)

 

0.9

1.9

Weighted-average discount rate – financing leases

 

7.3

%

7.3

%

The components of lease expense were as follows:

Year Ended September 30, 

    

2022

    

2021

Operating leases

 

  

 

  

Operating lease cost

$

943,215

$

360,340

Variable lease costs

 

2,400

 

18,216

Total operating lease cost

 

945,615

 

378,556

Short-term lease rent expense

 

40,719

 

113,158

Financing leases

 

 

Amortization of leased assets

 

112,951

 

9,413

Interest on lease liabilities

 

12,252

 

1,376

Financing lease cost

 

125,203

 

10,789

Net lease cost

$

1,111,537

$

502,503

As of September 30, 2022, future minimum lease payments under the non-cancelable leases were as follows:

    

Operating

    

Financing

Leases

Leases

Year Ending September 30, 2023

 

$

965,367

 

$

111,606

Year Ending September 30, 2024

 

874,320

 

Year Ending September 30, 2025

 

881,391

 

Year Ending September 30, 2026

 

888,627

 

Year Ending September 30, 2027

 

895,864

 

Thereafter

 

3,505,166

 

Total

 

8,010,735

 

111,606

Less present value discount

 

(2,122,505)

 

(3,974)

Operating lease liabilities

$

5,888,230

$

107,632