The Company leases one facility in Berkeley, California under an operating lease that has a remaining lease term of eleven years. The Company also leases one facility in Oss, the Netherlands under an operating lease that expires in December 2020. Both leases contain an option to extend for an additional term, however, the Company is not reasonably certain to exercise the option for either lease.

The Company is subleasing approximately 30,885 square feet in its Berkeley facility under subleases that expire on or prior to December 31, 2020. Sublease income was $0.4 million for the three months ended March 31, 2019.

During 2016, the Company established a letter of credit with Bank of America Merrill Lynch as security for the Berkeley lease in the amount of $0.5 million. The letter of credit is collateralized by a certificate of deposit for $0.5 million which has been included in restricted cash in the consolidated balance sheet as of March 31, 2019.

Future minimum payments under the leases at December 31, 2018 prior to the adoption of the new lease standard, ASC 842, were as follows (in thousands):

Year Ending December 31,	Amounts
2019	$	5,519
2020		5,669
2021		5,332
2022		5,460
2023		5,570
Thereafter		35,836
Total future minimum lease payments	$	63,386

As of January 1, 2019, the Company recognized ROU assets and lease liabilities for its operating leases. Aside from the operating leases, there were no other leases, including finance leases, recognized as of January 1, 2019.

The maturity of the Company’s operating lease liabilities as of March 31, 2019 is as follows:

Undiscounted Lease Payments	Amounts
2019 (remaining nine months)	$	4,153
2020		5,659
2021		5,332
2022		5,460
2023		5,570
Thereafter		35,836
Total undiscounted lease payments		62,010
Present value adjustment		27,441
Total net lease liability	$	34,569

Net lease liability - ST	$	1,539
Net lease liability - LT		33,030
Total net lease liability	$	34,569

Straight-line rent expense recognized for operating leases was $1.2 million and $1.3 million for the three months ended March 31, 2019 and March 31, 2018, respectively. Variable lease payments recognized as rent expense for operating leases were $0.3 million for the three months ended March 31, 2019, including non-lease components such as common area maintenance fees.

The following information represents supplemental disclosure for the condensed consolidated statement of cash flows related to operating leases:

March 31, 2019

Cash flows from operating activities

Cash paid for amounts included in the measurement of

lease liabilities

1,356

	March 31, 2019
Weighted-average remaining lease terms (in years)
Operating leases		10.55
Weighted-average discount rate
Operating leases		12	%

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ insurance.

The Company is not party to any material legal proceedings at this time. From time to time, the Company may become involved in various legal proceedings that arise in the ordinary course of its business.

The Company has various manufacturing, clinical, research and other contracts with vendors in the conduct of the normal course of its business. All contracts are terminable, with varying provisions regarding termination. If a contract with a specific vendor were to be terminated, the Company would only be obligated for the products or services that the Company had received at the time the termination became effective as well as non-cancelable and non-refundable obligations, including payment obligations for costs or expenses incurred by the vendor for products or services before the termination became effective. In the case of terminating a clinical trial agreement at a particular site, the Company would also be obligated to provide continued support for appropriate medical procedures at that site until completion or termination.