Replimune Group, Inc.REPL
Replimune Group, Inc. Commitments Disclosure
Commitments and contingencies
Leases
The Company leases real estate assets and equipment, and determination if an arrangement is a lease occurs at inception. For leases with terms greater than 12 months, the Company records a related right-of-use (“ROU”) asset and lease liability at the present value of lease payments over the term. Many leases include fixed rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. The Company’s leases do not provide an implicit rate, and thus the Company estimated the incremental borrowing rate in calculating the present value of the lease payments. The Company has elected not to record a ROU asset and lease obligation for short-term leases (with terms less than 12 months) or separate non-lease components from associated lease components for its real estate lease assets. As a result, all contract consideration is allocated to the single lease component.
The Company’s leases have remaining lease terms of five years to fifteen years. Some of the Company's leases include one or more options to renew with renewal terms that can extend the lease for additional years, or options to terminate the leases, both at the Company’s discretion. The Company’s lease terms include options to extend or terminate leases when the Company concludes it is reasonably certain that it would exercise those options. Lease expense for minimum lease payments is
recognized on a straight-line basis based on the fixed components of a lease arrangement. The Company amortizes this expense over the term of the lease beginning with the date of initial possession, which is the date the Company can enter the leased space and begin to make improvements in preparation for its intended use. Variable lease components represent amounts that are not fixed in nature and are not tied to an index or rate, and are recognized as incurred.
The table below presents the lease-related costs which are included in the consolidated statements of operations for the years ended as of March 31, 2025 and 2024:
| Year ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Lease cost | |||||||||||
| Finance lease costs: | |||||||||||
| Amortization of right-to-use asset | $ | 2,428 | $ | 2,428 | |||||||
| Interest on lease liabilities | 2,118 | 2,163 | |||||||||
| Operating lease costs | 1,129 | 1,122 | |||||||||
| Total lease cost | $ | 5,675 | $ | 5,713 | |||||||
The following table summarizes the classification of lease costs in the consolidated statement of operations for the years ended March 31, 2025 and 2024 as follows:
| Year ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Finance Lease Costs | |||||||||||
| Research and development | $ | 2,428 | $ | 2,428 | |||||||
Other income, net | 2,118 | 2,163 | |||||||||
| Operating Lease Costs | |||||||||||
| Research and development | 877 | 911 | |||||||||
| Selling, general and administrative | 252 | 211 | |||||||||
| Total lease cost | $ | 5,675 | $ | 5,713 | |||||||
The following table summarizes the maturity of the Company’s lease liabilities on an undiscounted cash flow basis and a reconciliation to the operating and financing lease liabilities recognized on our balance sheet as of March 31, 2025:
| March 31, 2025 | |||||||||||||||||
| Operating leases | Financing lease | Total | |||||||||||||||
| 2026 | $ | 1,184 | $ | 2,799 | $ | 3,983 | |||||||||||
| 2027 | 1,149 | 2,883 | 4,032 | ||||||||||||||
| 2028 | 1,096 | 2,969 | 4,065 | ||||||||||||||
| 2029 | 1,013 | 3,058 | 4,071 | ||||||||||||||
| 2030 | 579 | 3,096 | 3,675 | ||||||||||||||
| Thereafter | 361 | 28,899 | 29,260 | ||||||||||||||
| Total lease payments | 5,382 | 43,704 | 49,086 | ||||||||||||||
| Less: interest | 1,122 | 18,176 | 19,298 | ||||||||||||||
| Total lease liabilities | $ | 4,260 | $ | 25,528 | $ | 29,788 | |||||||||||
The following table provides lease disclosure as of and for the year ended March 31, 2025:
| March 31, 2025 | March 31, 2024 | ||||||||||
| Leases | |||||||||||
| Right-to-use operating lease asset | $ | 3,998 | $ | 4,635 | |||||||
| Right-to-use finance lease asset | 34,808 | 37,237 | |||||||||
| Total lease assets | $ | 38,806 | $ | 41,872 | |||||||
| Operating lease liabilities, current | $ | 1,184 | $ | 1,161 | |||||||
| Finance lease liabilities, current | 2,799 | 2,718 | |||||||||
| Operating lease liabilities, non-current | 3,076 | 3,771 | |||||||||
| Finance lease liabilities, non-current | 22,729 | 23,410 | |||||||||
| Total lease liabilities | $ | 29,788 | $ | 31,060 | |||||||
| Other information | |||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from operating leases | $ | 1,167 | $ | 1,059 | |||||||
| Operating cash flows from finance leases | $ | 2,118 | $ | 2,163 | |||||||
| Financing cash flows from finance leases | $ | 599 | $ | 476 | |||||||
Right-to-use asset obtained in exchange for new operating lease liabilities | $ | — | $ | 0 | |||||||
| Weighted-average remaining lease term – operating leases | 4.7 years | 5.6 years | |||||||||
| Weighted-average remaining lease term – financing leases | 14.3 years | 15.3 years | |||||||||
| Weighted-average discount rate – operating leases | 10.4 | % | 10.3 | % | |||||||
| Weighted-average discount rate – financing leases | 8.3 | % | 8.3 | % | |||||||
The variable lease costs and short-term lease costs were insignificant for the years ended March 31, 2025 and 2024, respectively.
Manufacturing commitments
The Company has entered into an agreement with a contract manufacturing organization to provide clinical trial products. As of March 31, 2025 and 2024, the Company had committed to minimum payments under these arrangements totaling $0.8 million and $0.9 million.
Indemnification agreements
In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its executive management team and its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and therefore it has not accrued any liabilities related to such obligations in its consolidated financial statements as of March 31, 2025 or 2024.
Legal proceedings
The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities.
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About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.