Leases

6 Months Ended

Jun. 30, 2023

The Company leases office, manufacturing, distribution and laboratory facilities in various locations in the United States, primarily in Emeryville, California and Branford, Connecticut. The Company also leases facilities in Shanghai, China for office and laboratory facilities. On December 28, 2022, the Company entered into a sub-lease arrangement for its facility in Lexington, Massachusetts. Sub-lease income for the three and six months ended June 30, 2023 was $0.2 million and $0.3 million, respectively and was recorded as an offset to rent expense. There was no sub-lease income during the three and six months ended June 30, 2022.

Future payments associated with the Company’s operating lease liabilities as of June 30, 2023 are as follows (in thousands):


	Operating leases

Undiscounted lease payments for the year ending December 31,
Remainder of 2023	$	3,121
2024	6,297
2025	5,952
2026	5,398
2027	4,759
Thereafter	7,464
Total undiscounted lease payments	32,991
Less: implied interest	(3,958)
Less: tenant improvement allowances receivable	(65)
Present value of operating lease payments	28,968
Less: current portion (1)	(5,018)
Total long-term operating lease liabilities	$	23,950

(1) Included in the balance sheet caption “Accrued expenses and other current liabilities.”

Rent expense, net for the three and six months ended June 30, 2023 was $1.6 million and $2.5 million, respectively. Rent expense, net for the three and six months ended June 30, 2022 was $1.4 million and $2.5 million, respectively. Under the terms of the lease agreements, the Company is also responsible for certain variable lease payments that are not included in the measurement of the lease liability. Variable lease payments for operating leases were $0.8 million and $1.6 million for the three and six months ended June 30, 2023, respectively, including non-lease components such as common area maintenance fees. Variable lease payments for operating leases were $1.0 million and $1.8 million for the three and six months ended June 30, 2022, respectively, including non-lease components such as common area maintenance fees.

The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands):


	Six months ended June 30, 2023		Six months ended June 30, 2022


Right-of-use assets obtained for new operating lease liabilities	$	—	$	—
Right-of-use lease assets assumed in IsoPlexis Merger	$	4,975	$	—
Cash paid for amounts included in the measurement of lease liabilities	$	3,123	$	1,070

The following summarizes additional information related to operating leases:


	June 30, 2023		December 31, 2022

Weighted-average remaining lease term (years)	5.50		6.48
Weighted-average discount rate	4.72	%	4.66	%

The Company also enters into leasing transactions in which the Company is the lessor, which to date have been classified as sales-type leases. See Note 6 for the related sales-type lease disclosures.

PhenomeX Inc. 10-Q