Vor Biopharma Inc. Leases Disclosure
9. Leases
Cambridgepark Lease
In December 2019, the Company entered into a lease agreement for its new corporate office and laboratory facility (the “Cambridgepark Lease”) in Cambridge, Massachusetts. The Cambridgepark Lease has a term of 10 years, beginning on the rent commencement date which is two months after the lease commencement date. There are no options to extend the lease. The lease commencement date, for accounting purposes, was deemed to be reached as of June 30, 2020.
On June 15, 2021, the Company entered into the first lease amendment (“First Lease Amendment”) and the second lease amendment (“Second Lease Amendment” and, together with the First Lease Amendment, the “Lease Amendments”) with PPF Off 100 Cambridge Park Drive, LLC (the “Landlord”). The Lease Amendments amended the Cambridgepark Lease with the Landlord in Cambridge, Massachusetts to add additional leased space in the same building (the “Amended Cambridgepark Lease”).
The First Lease Amendment expanded the amount of space leased by the Company by an additional 10,262 square feet in exchange for aggregate total fixed rent payments of approximately $8.4 million with the annual fixed rental payments escalating from $0.8 million to $1.1 million during the term. The First Lease Amendment commenced for accounting purposes on January 28, 2022.
The Second Lease Amendment expands the amount of space leased by the Company by an additional 30,175 square feet in exchange for aggregate total fixed rent payments of approximately $22.3 million with the annual fixed rental payments escalating from $1.1 million to $3.0 million during the term. The Second Lease Amendment’s term commenced for accounting purposes on April 29, 2022.
Payments associated with the Amended Cambridgepark Lease include fixed and variable payments. Variable payments relate to the Company’s share of the Landlord’s operating costs associated with the underlying assets and are recognized when the event on which those payments are assessed. The Amended Cambridgepark Lease does not contain a residual value guarantee. The Lease Amendments term end dates are coterminous with the Cambridgepark
Lease. In conjunction with the Amended Cambridgepark Lease, the Company was required to establish a $2.4 million irrevocable standby letter of credit for the benefit of the Landlord, which has been secured by money market investments and is presented as restricted cash equivalents.
The elements of lease expense were as follows:
|
|
Year Ended December 31, |
|
|||||
(in thousands) |
|
2024 |
|
|
2023 |
|
||
Operating lease cost |
|
$ |
7,804 |
|
|
$ |
7,802 |
|
Variable lease cost |
|
|
2,653 |
|
|
|
2,618 |
|
Total lease cost |
|
$ |
10,457 |
|
|
$ |
10,420 |
|
Amounts reported in the consolidated balance sheets and the weight-average lease term and discount rate information were as follows:
(in thousands except weighted-average amounts) |
|
December 31, 2024 |
|
|
December 31, 2023 |
|
||
Assets |
|
|
|
|
|
|
||
Operating lease right-of-use assets |
|
$ |
35,007 |
|
|
$ |
40,048 |
|
Liabilities |
|
|
|
|
|
|
||
Operating lease liabilities, current |
|
$ |
4,215 |
|
|
$ |
3,830 |
|
Operating lease liabilities, non-current |
|
|
27,615 |
|
|
|
31,830 |
|
Total lease liabilities |
|
$ |
31,830 |
|
|
$ |
35,660 |
|
Weighted-Average Lease Term and Discount Rate |
|
|
|
|
|
|
||
Weighted-average remaining lease term (years) |
|
|
5.7 |
|
|
6.7 |
|
|
Weighted-average discount rate |
|
|
8.2 |
% |
|
|
8.2 |
% |
The following table represents other lease activity:
|
|
Year Ended December 31, |
|
|||||
(in thousands) |
|
2024 |
|
|
2023 |
|
||
Other Information |
|
|
|
|
|
|
||
Cash paid for amounts included in the measurement of lease liabilities |
|
|
|
|
|
|
||
Operating cash flows for operating leases |
|
$ |
6,591 |
|
|
$ |
6,658 |
|
Future lease payments for noncancelable leases as of December 31, 2024 were as follows:
(in thousands) |
|
December 31, 2024 |
|
|
2025 |
|
$ |
6,652 |
|
2026 |
|
|
6,681 |
|
2027 |
|
|
6,882 |
|
2028 |
|
|
7,088 |
|
2029 |
|
|
7,301 |
|
Thereafter |
|
|
5,602 |
|
Total lease payments |
|
$ |
40,206 |
|
Less: imputed interest |
|
|
(8,376 |
) |
Present value of lease liabilities |
|
$ |
31,830 |
|
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.