Leases

9 Months Ended

Sep. 30, 2020

6. Leases

The Company has one material operating lease pertaining to 17,698 square feet of corporate office space in Newark, California pursuant to a lease agreement that commenced January 16, 2014 and was amended on April 16, 2018. As of September 30, 2020, the Company’s lease portfolio had a weighted average remaining term of 3.3 years, with an option to extend for an additional 5 years. The lease requires monthly lease payments that are subject to annual increases throughout the lease term. The optional period has not been considered in the determination of the

right-of-use

assets or lease liabilities associated with this lease as the Company did not consider it reasonably certain it would exercise the option.

The Company cannot determine the implicit rate in its lease, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used an incremental borrowing rate as of the date of adoption for leases that commenced prior to January 1, 2019. The weighted average discount rate for the Company’s lease portfolio at September 30, 2020 was 12.6%.

The Company incurred

rent expense

of $

0.1

million and $

0.4

million for the

three

and

nine

months ended September

30,

2020,

respectively, and $

0.2

million and $

0.4

million for the

three

and

nine

months ended September

30,

2019,

respectively, that are included in operating expenses in the condensed consolidated statements of

operations

and comprehensive

loss

in relation to its operating lease, a portion of which was variable rent expense and not included within the measurement of the Company’s operating

right-of-use

assets and lease liabilities. The variable rent expense consists primarily of the Company’s proportionate share of operating expenses, property taxes, and insurance and is classified as lease expense due to the Company’s election to not separate lease and

non-lease

components. Short-term lease costs were not material. As of September

30,

2020,

the Company’s operating lease

right-of-use

asset totaled $

0.3

million, and the operating lease liability totaled $

1.9

million. The short-term portion of the operating lease liability was $

0.5

million and is contained within other accrued liabilities on the balance sheet, with the remaining $

1.4

million liability reported on the balance sheet as long-term portion of operating lease liability.

Total cash paid for operating leases for the three and nine months ended September 30, 2020 was $0.2 million and $0.5 million, respectively.

As of September 30, 2020, the maturities of the Company’s operating lease liabilities were as follows (in thousands):


	Lease
	Payments
Year ending December 31,
2020 (October through December)	$	163
2021		667
2022		686
2023		707
2024		30

Total undiscounted future minimum lease payments	$	2,253
Less: imputed interest		402

Total operating lease liability	$	1,851
Less: current portion of operating lease liability (included in other accrued liabilities)		462

Long-term portion of lease liability	$	1,389