LEASES

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

LEASES

LEASES

The Company determines whether an arrangement is a lease at its inception. Operating leases relate primarily to office space and manufacturing facilities with remaining lease terms of one year to seven years, some of which include options to extend the lease term for up to five years. Management considered the options in determining the lease term used to establish the Company's ROU assets and lease liabilities.

The Company entered into a lease agreement for office space and equipment in South San Francisco, California commencing in April 2019 and expiring in 2022. The Company recorded right-of-use assets of $1.2 million and leased assets of $0.2 million for the real estate and equipment components of the lease, respectively, and a corresponding lease liability of $1.4 million upon lease commencement.

In July 2019, the Company exercised the first of its renewal options to extend its lease of office and laboratory space at its Houston, Texas facility for an additional year, commencing February 1, 2020. As a result of the lease renewal, the Company recorded an incremental ROU asset and lease liability of $1.0 million upon exercising the option.

As most of the Company's leases do not provide an implicit rate, the Company's incremental borrowing rate is based on the information available at lease commencement date and was used to determine the present value of lease payments. Components of lease cost are as follows:

(in thousands)	Year Ended December 31, 2019
Finance lease cost:
Amortization of leased assets	$	61
Interest on lease liabilities	25
Operating lease cost	2,135
Short-term lease cost	296
Total lease cost	$	2,517
Weighted-average remaining lease term:
Operating leases	5.2 years
Finance leases	2.4 years
Weighted-average discount rate:
Operating leases	12.1		%
Finance leases	13.4		%

Supplemental cash flow information and non-cash activity related to the Company's operating and finance leases are as follows:

(in thousands)	Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,378
Operating cash flows from finance leases	25
Financing cash flows from finance leases	47
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	2,263

Maturities of lease liabilities by year for leases are as follows:

(in thousands)	Operating Leases			Financing Leases
2020	$	2,663		$	96
2021	1,673			90
2022	1,418			39
2023	1,143			—
2024	1,185			—
2025 and beyond	2,065			—
Total lease payments	10,147			225
Less: Imputed interest	(2,748		)	(33		)
Present value of lease liabilities	$	7,399		$	192

As of December 31, 2018, minimum lease payments under non-cancelable leases by period were expected to be as follows (in thousands):

Year	Operating Leases		Capital Leases
2019	$	2,087	$	68
2020	1,112		68
2021	1,055		43
2022	1,094		—
2023	1,133		—
Thereafter	3,222		—
Total minimum rentals	$	9,703	$	179

LEASES

LEASES

The Company determines whether an arrangement is a lease at its inception. Operating leases relate primarily to office space and manufacturing facilities with remaining lease terms of one year to seven years, some of which include options to extend the lease term for up to five years. Management considered the options in determining the lease term used to establish the Company's ROU assets and lease liabilities.

The Company entered into a lease agreement for office space and equipment in South San Francisco, California commencing in April 2019 and expiring in 2022. The Company recorded right-of-use assets of $1.2 million and leased assets of $0.2 million for the real estate and equipment components of the lease, respectively, and a corresponding lease liability of $1.4 million upon lease commencement.

In July 2019, the Company exercised the first of its renewal options to extend its lease of office and laboratory space at its Houston, Texas facility for an additional year, commencing February 1, 2020. As a result of the lease renewal, the Company recorded an incremental ROU asset and lease liability of $1.0 million upon exercising the option.

As most of the Company's leases do not provide an implicit rate, the Company's incremental borrowing rate is based on the information available at lease commencement date and was used to determine the present value of lease payments. Components of lease cost are as follows:

(in thousands)	Year Ended December 31, 2019
Finance lease cost:
Amortization of leased assets	$	61
Interest on lease liabilities	25
Operating lease cost	2,135
Short-term lease cost	296
Total lease cost	$	2,517
Weighted-average remaining lease term:
Operating leases	5.2 years
Finance leases	2.4 years
Weighted-average discount rate:
Operating leases	12.1		%
Finance leases	13.4		%

Supplemental cash flow information and non-cash activity related to the Company's operating and finance leases are as follows:

(in thousands)	Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,378
Operating cash flows from finance leases	25
Financing cash flows from finance leases	47
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	2,263

Maturities of lease liabilities by year for leases are as follows:

(in thousands)	Operating Leases			Financing Leases
2020	$	2,663		$	96
2021	1,673			90
2022	1,418			39
2023	1,143			—
2024	1,185			—
2025 and beyond	2,065			—
Total lease payments	10,147			225
Less: Imputed interest	(2,748		)	(33		)
Present value of lease liabilities	$	7,399		$	192

As of December 31, 2018, minimum lease payments under non-cancelable leases by period were expected to be as follows (in thousands):

Year	Operating Leases		Capital Leases
2019	$	2,087	$	68
2020	1,112		68
2021	1,055		43
2022	1,094		—
2023	1,133		—
Thereafter	3,222		—
Total minimum rentals	$	9,703	$	179