LEASES

9 Months Ended

Sep. 30, 2020

The Company determines whether an arrangement is a lease at its inception. Operating leases relate primarily to office and laboratory space with remaining lease terms of approximately two to three years. If operating leases include options to extend the lease term, management will consider 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 and laboratory space in Houston, Texas commencing in July 2020 and expiring in 2023. The Company recorded ROU assets of $0.5 million and a corresponding lease liability of $0.6 million upon lease commencement. The Company received a construction allowance of $0.1 million which was capitalized as leasehold improvements during the three and nine months ended September 30, 2020.

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

Components of lease cost are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2020		2019		2020		2019
Finance lease cost:
Amortization of leased asset	$	18	$	18	$	54	$	42
Interest on lease liabilities	5		7		17		17
Operating lease cost	169		594		668		1,587
Short-term lease cost	235		—		476		47
Total lease cost	$	427	$	619	$	1,215	$	1,693


	September 30, 2020
Weighted-average remaining lease term:
Operating leases	2.43 years
Finance leases	1.66 years
Weighted-average discount rate:
Operating leases	11.55	%
Finance leases	13.18	%

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


	Nine Months Ended September 30,
(in thousands)	2020		2019
Operating cash flow information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	827	$	1,741
Operating cash flows from finance leases	17		17
Financing cash flows from finance leases	56		30
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	597	$	2,263

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


(in thousands)	Operating Leases		Financing Leases
2020	$	279	$	24
2021	757		90
2022	571		39
2023	286		—
2024 and beyond	—		—
Total lease payments	1,893		153
Less: Imputed interest	(244)		(16)
Present value of lease liabilities	$	1,649	$	137