Company: PRME
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001628280-25-038619
Chunk: 45

Company: Prime Medicine, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 45
---
”). Subsequent to the initial non-cancelable term of the lease of ten years, the Company has an option to extend the lease for an additional period of ten years with the rent during the extension term being the then fair market rent. The Company secured the lease with a $13.1 million security deposit, which was recorded as restricted cash on the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024.Accounting ConsiderationsThe Company determined that the lease contained three separate lease components, each of which represents a right of use that the Company can benefit from on its own and neither of which are highly dependent nor highly related to each other. The Company allocated the consideration among the three lease components based on their relative fair market values.In accordance with ASC 842, Leases, the lease commenced for one of the lease components in March 2024 and the Company recorded a right-of-use asset of $44.9 million, and a corresponding lease liability of $33.6 million on the lease commencement date; this included a reclass of $11.3 million from prepaid expenses to right-of-use asset related to build out costs which were determined to be owned by the lessor. In March 2025, the Company determined that the lease commenced on the remaining two lease components and recorded right-of-use assets of $76.8 million, and a corresponding lease liability of $78.6 million on the lease commencement date. As the exercise of the option to extend the lease term is not reasonably certain, the Company will recognize lease expense for all lease components through February 2034.In June 2024, the Company filed a complaint in Massachusetts Superior Court against NW Cambridge Property Owner, LLC (“NWC”), the Company’s landlord at 60 First Street, alleging that NWC had breached the 60 First Street Lease by, among other reasons, refusing to provide the Company with certain rental credits for the late delivery of the leased space. While this lawsuit is pending, the Company continued to make the disputed payments under the 60 First Street Lease under protest. The disputed payments are recorded within other current assets on the Company’s condensed consolidated balance sheets. Total payments made under dispute was $13.9 million, and $10.8 million as of June 30, 2025 and December 31, 2024, respectively.

16

Arsenal Street, Watertown, Massachusetts LeasesIn August 2024, the Company entered into the third amendment to its existing lease for