11. Facility Lease

In January 2015, the Company signed an initial operating lease, effective February 1, 2015 for 8,138 square feet of office and laboratory space with a one year term. Between January 2015 and October 2018, the Company entered into a series of lease amendments to increase the amount of leased space to 27,280 square feet and extend the expiration of the lease to February 2023. The lease agreement includes annual rent escalations. Under the lease and subsequent amendments, the landlord provided approximately $1.9 million in free rent and lease incentives. The Company records rent expense on a straight-line basis over the effective term of the lease, including any free rent periods and incentives. As the interest rate implicit in lease arrangements is typically not readily available, in calculating the present value of the lease payments, the Company has utilized its incremental borrowing rate, which is determined based on the prevailing market rates for collateralized debt with maturity dates commensurate with the term of its lease. The Company’s facility lease is a net lease, as the non-lease components (i.e. common area maintenance) are paid separately from rent based on actual costs incurred. Therefore, the non-lease components were not included in the right-of-use asset and liability and are reflected as an expense in the period incurred.

As of December 31, 2019 and 2018, the right-of-use asset under operating lease was $2.3 million and $0, respectively. The elements of lease expense were as follows (in thousands):



	Statements of operations and	Year Ended December 31,
	comprehensive loss location	2019		2018		2017
Costs of operating lease
Operating lease costs	Research and development, General and administrative	$	960	$	748	$	734
Costs of non-lease components (previously common area maintenance)	Research and development, General and administrative		324		296		281
Total operating lease cost		$	1,284	$	1,044	$	1,015
Other Information
Operating cash flows used for operating lease		$	1,449	$	1,389	$	1,398
Remaining lease term			3.1 years		4.1 years		3.1 years
Discount rate			10.0%		—		—

As of December 31, 2019, minimum rental commitments under this lease were as follows (in thousands)


Year Ended December 31 (in thousands)
2020	$	1,159
2021		1,260
2022		1,299
Total lease payments		3,718
Less: imputed interest		(530)
Total	$	3,188

As of December 31, 2018, minimum rental commitments under this lease were as follows (in thousands)


Year Ended December 31 (in thousands)
2019	$	1,110
2020		1,142
2021		1,251
2022		1,296
2023		109
Total	$	4,908