Leases

12 Months Ended

Dec. 31, 2019

Operating Leases

The Company adopted FASB ASU

No. 2016-02,

Leases

(Topic 842)

on January 1, 2019 using the effective date method, in which it did not restate prior periods. Upon adoption, the Company elected the package of practical expedients permitted under the transition guidance within Topic 842 which, among other things, allowed it to carry forward the historical lease classification. The Company does not allocate consideration in its leases to lease and

non-lease

components and does not record leases on its balance sheets with terms of 12 months or less.

The Company uses its estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company’s incremental borrowing rate represents the rate of interest that it would have to pay to borrow over a similar term an amount equal to the lease payments in a similar economic environment. The Company considers publicly available data for instruments with similar terms and characteristics when determining its incremental borrowing rates.

The adoption of Topic 842 resulted in recognition of approximately $1.6 million of

right-of-use

assets and $1.6 million of lease liabilities on the Company’s balance sheets on January 1, 2019. The adoption did not have a material impact on the Company’s statements of operations or accumulated deficit. The Company will review the classification of newly entered leases as either an operating or a finance lease and recognize a related

right-of-use

asset and lease liabilities on its balance sheets upon commencement.

In June 2012, the Company entered into a master lease for the Company’s corporate

office

headquarters in Boston, which was originally set to expire in August 2016, but renewed through August 31, 2021. As of December 31, 2019, and December 31, 2018, a total security deposit of $0.1 million is included in deposits on the Company’s balance sheet. On January 30, 2018, the Company entered into a lease agreement for office space in Houston at MD Anderson. Under the terms of the MD Anderson Lease, the Company leases approximately two hundred and ten square feet and are required to make rental payments at an average monthly rate of approximately $1.0 thousand through April 2021. All future rent expense incurred in Houston, will be deducted from the Company’s prepayments at MD Anderson.

On March 12, 2019, the Company entered into a lease agreement for office space in Houston. Under the terms of the First Houston Lease agreement, the Company leases approximately one thousand and thirty-eight square feet and is required to make rental payments at an average monthly rate of approximately $2.0 thousand through April 2021. On October 15, 2019, the Company entered into a lease agreement for additional office space in Houston. Under the terms of the Second Houston Lease, the Company leases approximately eight thousand four hundred and forty-three square feet and is initially required to make rental payments of approximately $17.0 thousand through February 2027, subject to an annual base rent increase of approximately 3.0% throughout the term.

The components of lease expense were as follows:


(in thousands)	Year Ended December 31, 2019
Operating lease cost	$	772

Total lease cost	$	772

Weighted-average remaining lease term (years)		4.42
Weighted-average discount rate		8.00	%

Cash paid for amounts included in the measurement of the lease liabilities were $0.7 million for the year-ended December 31, 2019. The Company recognized new operating lease assets obtained in exchange for operating lease liabilities of $1.2 million for the year-ended December 31, 2019.

As of December 31, 2019, the maturities of the Company’s operating lease liabilities were as follows (in thousands):


Maturity of Lease Liabilities	Operating Leases
2020	$	925
2021		701
2022		213
2023		220
2024		226
Thereafter		514

Total lease payments	$	2,799
Less: Imputed Interest and Adjustments		(447	)

Present value of lease payments	$	2,352

Disclosures related to periods prior to adoption of the New Lease Standard

Prior to the adoption of ASC 842, the Company recorded rent expense on a straight-line basis over the term of the lease under ASC 840. Total rent expense was approximately $0.7 million and $0.7 million for the years ended December 31, 2018 and 2017, respectively.

For comparative purposes, the Company’s aggregate future minimum

non-cancellable

commitments under operating leases as of December 31, 2018 were as follows:


2019		723
2020		736
2021		488

Future minimum lease payments, net	$	1,947