Leases

12 Months Ended

Dec. 31, 2019

The Company has operating leases for offices, research and development facilities and manufacturing facilities. Leases have remaining terms of less than one year to seven years, some of which include options to extend the leases and some of which may include options to terminate the leases within one year.

On June 13, 2017, the Company entered into an office lease for approximately 39,000 square feet for the Company’s current headquarters in San Jose (the “Lease”) with a commencement date of June 1, 2017. Upon commencement, the Lease had an initial term of one hundred and twenty-three (123) months, ending September 30, 2027, (the “Initial Term”) with a monthly rental rate of $41,000, escalating annually to a maximum monthly rental rate of approximately $73,000 in the last year of the Initial Term. Upon termination of the Lease, the Company anticipates a restoration cost of approximately $0.7 million.

In September 2016, the Company entered into an office lease for approximately 64,000 square feet of office and laboratory space located in San Jose (the “Lease”). The term of the Lease commenced on January 1, 2017. Upon commencement, the Lease has an initial term of one hundred and twenty-nine (129) months, ending on September 30, 2027 (the “Initial Term”), with an initial monthly rental rate of $144,000, escalating annually to a maximum monthly rental rate of approximately $194,000 in the last year of the Initial Term. The Landlord has agreed to provide the office and laboratory space to the Company free of charge for the first nine months of the Initial Term through September 30, 2017. Upon termination of the Lease, the Company anticipates a restoration cost of approximately $3.1 million.

As of December 31, 2019 and December 31, 2018, an asset recorded in property, plant and equipment under a finance lease was immaterial.

The components of lease expense were as follows (in thousands):



	Year Ended December 31,
	2019
Operating lease cost	$	3,026
Variable and short-term lease cost	1,482
Total lease cost	$	4,508

Other information related to leases was as follows (in thousands, except lease term and discount rate):



	Year Ended December 31,
	2019
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,600
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	136
Weighted average remaining lease term (in years)
Operating leases	7.4
Weighted average discount rate
Operating leases	6.4		%

Future minimum lease payments under non-cancelable leases as of December 31, 2019 were as follows (in thousands):



	Operating Leases
2020	$	3,227
2021	3,099
2022	3,094
2023	3,043
2024	2,944
Thereafter	8,257
Total future minimum lease payments	23,664
Less imputed interest	(5,035		)
Total	$	18,629



Reported as of December 31, 2019:	Operating Leases
Accrued and other current liabilities	$	2,086
Operating lease liabilities, noncurrent	16,543
Total	$	18,629

As of December 31, 2018, the future minimum payments under lease agreements in accordance with our historical accounting policies under Topic 840 were as follows (in thousands):



	Operating Leases
2019	$	3,618
2020	3,113
2021	3,059
2022	3,056
2023	3,049
Thereafter	11,437
Total future minimum lease payments	$	27,332

The Company recognized rent expense on a straight-line basis over the lease period. Rent expense under the Company’s operating leases was $4.2 million and $4.6 million, respectively, in the years ended December 31, 2018 and 2017.