Leases

3 Months Ended

Jun. 30, 2019

The Company leases 40,232 square feet of office space located in Brisbane, California pursuant to an operating lease agreement, as amended, that expires in May of 2026. The Company has the option to extend the lease term for an additional seven years but is not reasonably certain that it will exercise the option and has therefore excluded it from the lease term. The lease agreement, as amended, required the Company to deliver an irrevocable standby letter of credit for the duration of the lease in the amount of $0.5 million to the landlord, the amount of which is subject to reduction of approximately $0.2 million if certain conditions are met. The Company currently has no other significant operating, financing, or short-term leases.

The components of operating lease expense for the Company’s Brisbane, California office space were as follows (in thousands):



	Three Months Ended June 30, 2019
Operating lease cost	$	519
Variable lease cost ⁽¹⁾	9
Total operating lease cost	$	528

⁽¹⁾ Variable lease cost includes common area maintenance and utilities costs which are not included in operating lease liabilities and which are expensed as incurred.

Information related to the Company’s operating lease right-of-use asset and operating lease liabilities for its Brisbane, California office space was as follows (in thousands, except periods and percentages):



	June 30, 2019
Cash paid for operating lease liabilities	$	496
Operating lease right-of-use asset obtained in exchange for operating lease liabilities	9,181
Weighted average remaining lease term (in years)	6.9
Weighted average discount rate	12.28		%

As of June 30, 2019, maturities of operating lease liabilities for the Company’s Brisbane, California office space were as follows (in thousands):



Years Ended March 31,
2020 (remainder of year)	$	1,510
2021	2,065
2022	2,128
2023	2,200
2024	2,339
Thereafter	5,307
Total lease payments	15,549
Less imputed interest ⁽¹⁾	(5,186		)
Present value of future minimum lease payments	10,363
Less operating lease liability, current portion	(813		)
Operating lease liability, long-term portion	$	9,550

⁽¹⁾ The Company’s lease contracts do not provide an implicit rate. The imputed interest was determined using the Company’s incremental borrowing rate, which represents an estimated rate of interest that it would have to pay to borrow equivalent funds on a collateralized basis over a similar term at the lease inception date.