Company: PRME
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001628280-25-023486
Chunk: 38

Company: Prime Medicine, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 38
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 affiliates.The 480 Arsenal Amendment provides the Company with an additional 9,400 square feet of combined laboratory and office space (the “Expansion Space”) at no additional cost and also provides an early termination date for the existing space and the Expansion Space as the later of: 1) the date occurring 150 days after the lease commencement of 500 Arsenal Lease, or 2) 30 days after substantial completion, as defined in the 500 Arsenal Lease, of tenant improvements at 500 Arsenal Street. If the 500 Arsenal Lease is terminated prior to its lease commencement such that the lease commencement never occurs, the Company will begin paying lease payments on the Expansion Space at the current rate for its existing space at 480 Arsenal Street and the early termination provisions of the 480 Arsenal Amendment become null and void.The 500 Arsenal Lease term commenced in December 2024 with a base term of 11 months. In December 2024, the Company began constructing improvements to the space, the construction for which was completed in 2025. Subsequent to the base term, the Company has an option to extend the lease through August 2028, which it exercised in February 2025. The Company secured the lease with a $0.6 million security deposit, which is recorded as restricted cash on the condensed consolidated balance sheets as of March 31, 2025. The 500 Arsenal Lease also provides a tenant improvement allowance of $2.4 million and an additional tenant improvement allowance of $1.2 million, which the Company would be obligated to repay to the landlord. The Company did not use the additional tenant improvement allowance.Accounting ConsiderationsAs the 480 Arsenal Amendment and the 500 Arsenal Lease meet the criteria for combining contracts under ASC 842, the Company determined that both 480 Arsenal Amendment and the 500 Arsenal Lease are modifications to its existing lease at 480 Arsenal Street. Within the combined contract the Company identified two separate lease components, each of which represents a right of use that the Company can benefit from on its own and none which are neither highly dependent nor highly related to the other. The Company allocated the consideration under the combined contract among the two lease components based on their relative fair market value. In calculating the allocable consideration and the fair market value of each lease component, the Company determined it is probable that it will exercise the option to extend the lease term provided under the 500 Arsenal Lease.For accounting purposes, as the construction of the lessor assets were completed, the Company determined that the