The Company leases certain office space, laboratory space, and equipment. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. The Company does not recognize right-of-use assets or lease liabilities for leases determined to have a term of 12 months or less. For new and amended leases beginning in 2019 and after, the Company has elected to account for the lease and non-lease components as a combined lease component.

In August 2010, the Company entered into an operating lease for office and laboratory space at its headquarters in Lexington, Massachusetts. The lease commenced in January 2011, with the Company providing a security deposit of $400,000. In accordance with the operating lease agreement, the Company reduced its security deposit to $180,000 in January 2018, which is recorded as restricted cash in the consolidated balance sheets. In March 2017, the Company entered into an amendment to extend the term to December 2021.

In May 2013, the Company entered into an operating lease for additional office, laboratory and manufacturing space in Wilmington, Massachusetts. In August 2018, the Company entered into an amendment to extend the term to December 2020.

In November 2014, the Company entered into an agreement to rent additional office space in Lexington, Massachusetts. In April 2015, the Company entered into an amendment to extend the term to December 31, 2017. In connection with this agreement, the Company paid a security deposit of $50,000, which is recorded as a component of other assets in the consolidated balance sheets. In May 2015, the Company entered into an amendment to expand existing manufacturing facilities in Lexington, Massachusetts. In September 2017, the Company entered into an amendment to extend the term to December 31, 2021.

In November 2014, the Company entered into a lease for additional laboratory space in Lexington, Massachusetts. The lease term commenced in April 2015 and extended for six years. The rent expense, inclusive of the escalating rent payments, is recognized on a straight-line basis over the lease term. As an incentive to enter into the lease, the landlord paid approximately $1.4 million of the $2.2 million space build-out costs. Prior to the adoption of ASC 842, the incentive was recorded as a component of lease incentives on the consolidated balance sheets and was amortized as a reduction in rent expense on a straight-line basis over the term of the lease. Upon adoption of the new standard the unamortized balance of the lease incentive as of January 1, 2019 was reclassed as a reduction to the initial recognition of the right-of-use asset related to this lease. In connection with this lease agreement, the Company paid a security deposit of $281,000, which is recorded as a component of both prepaid expenses and other current assets and other assets in the consolidated balance sheets.

Operating leases are amortized over the lease term and included in costs and expenses in the condensed consolidated statement of operations and comprehensive loss. Variable lease costs are recognized in costs and expenses in the condensed consolidated statement of operations and comprehensive loss as incurred.

In October 2015, the Company signed a $10.0 million Credit Facility (the “Credit Facility”) to fund capital equipment needs. As one of the conditions of the agreement, the Credit Facility is capped at a maximum of $5.0 million. Under the Credit Facility, the lender will fund capital equipment purchases presented by the Company. The Company will repay the amounts borrowed in 36 equal monthly installments from the date of the amount funded. At the end of the 36 month lease term, the Company has the option to (a) repurchase the leased equipment at the lesser of fair market value or 10% of the original equipment value, (b) extend the applicable lease for a specified period of time, which will not be less than one year, or (c) return the leased equipment to the lessor.

In April 2016 and June 2016, the Company completed the first two draws under the Credit Facility of $2.1 million and $2.5 million, respectively. The Company made monthly payments of $67,000 under the first draw and $79,000 under the second draw. The borrowings under the Credit Facility are treated as finance leases and are included in property and equipment on the balance sheet. The amortization of the assets conveyed under the Credit Facility is included as a component of depreciation expense.

The following table summarizes the effect of operating and finance lease costs in the Company’s condensed consolidated statement of operations and comprehensive loss (in thousands):

Lease cost	Three months ended June 30, 2019		Six months ended June 30, 2019
Finance lease cost:
Amortization of right-of-use assets	$	118	$	234
Interest on lease liabilities		9		36
Operating lease cost		499		998
Variable lease cost		148		320
Total lease cost	$	774	$	1,588

The following table summarizes supplemental information for the Company’s finance and operating leases:

Other information	Six months ended June 30, 2019
Weighted-average remaining lease term - finance leases (in years)		—
Weighted-average remaining lease term - operating leases (in years)		2.4
Weighted-average discount rate - finance leases		—
Weighted-average discount rate - operating leases		11.9	%

The minimum lease payments for the next five years and thereafter is expected to be as follows (in thousands):

	June 30, 2019
Maturity of lease liabilities	Operating Leases			Finance Leases
2019 (excluding the 6 months ended June 30, 2019)	$	1,131		$	459
2020		2,313			—
2021		1,951			—
2022		23			—
2023		—			—
Thereafter		—			—
Total lease payments	$	5,418		$	459
Less: effect of discounting		(681	)		—
Present value of lease liabilities	$	4,737		$	459

The following table summarizes the presentation of the Company’s operating leases in its condensed consolidated balance sheets (in thousands):

Leases	Classification	June 30, 2019
Assets
Operating lease assets	Operating lease assets	$	4,108
Finance lease assets	Property and equipment, net		761
Total lease assets		$	4,869

Liabilities
Current
Operating	Accrued expenses and other current liabilities	$	1,844
Finance	Notes payable		459
Noncurrent
Operating	Noncurrent operating lease liabilities		2,893
Finance	Notes payable, net of current portion		—
Total lease liabilities		$	5,196

Under ASC 840, future minimum non-cancelable lease payments under the Company’s operating leases as of December 31, 2018 were as follows (in thousands):

Year ended December 31,
2019	$	2,225
2020		2,277
2021		1,926
	$	6,428

Under ASC 840, rent expense for the years ended December 31, 2018, and 2017 was $2.0 million, and $1.9 million, respectively.