NOTE

Leas

The Company has obtained the right of use for office and manufacturing facilities under

five

operating lease agreements,

one

of which has been subleased, and for equipment under an operating lease agreement with an initial term exceeding

one

year, and under

three

operating lease agreements with initial terms of

one

year or less.

The Company obtained the right of use of real estate located in South San Francisco, California, in

June 2015

that was scheduled to terminate on

April 30, 2020,

with a

five

-year extension option that the Company exercised in

July 2019,

extending the lease until

April 30, 2025.

The right of use of these premises was assessed as partially impaired as of

December 31, 2019 (

see Note

). The Company also obtained, via the Merger in

February 2018,

the right of use of facilities located in Alpharetta, Georgia, that terminates on

February 28, 2021,

with

extension option. These facilities were subleased for the remainder of the lease term effective

November 30, 2018.

In addition, the Company has the right of use of

two

facilities located in South San Francisco, California, under leases that terminate on

July 31, 2021,

with

extension options, and the right of use of equipment under a lease that terminates in

September 2021.

Further, the Company has identified an embedded lease for the rental of facilities in Burlingame, California, within a Statement of Work for the manufacture of bulk vaccine product that is expected to be completed by

September

2021.

As of

September 30, 2020

, the weighted average discount rate for operating leases with initial terms of more than

one

year was

10.34%

and the weighted average remaining term of these leases was

2.58

years. Discount rates were determined using the Company's marginal rate of borrowing at the time each lease was executed or extended.

The following table summarizes the Company's undiscounted cash payment obligations for its operating lease liabilities with initial terms of more than

twelve

months as of

September 30, 2020

(in thousands):

Year Ending December 31,
2020 (excluding the nine months ended September 30, 2020)	$	265
2021		1,719
2022		336
2023		348
2024		360
Thereafter		122
Undiscounted total		3,150
Less: imputed interest		(419	)
Present value of future minimum payments		2,731
Current portion of operating lease liability		(1,699	)
Operating lease liability, net of current portion	$	1,032

The Company presently has

finance leases and

future obligations under operating leases for equipment with initial terms of

one

year or less.

Certain operating lease agreements for facilities include non-lease costs, such as common area maintenance, which are recorded as variable lease costs. Operating lease expenses for the

three

and

nine

months ended

September 30,

2020

and

2019

, are summarized as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Lease cost	(in thousands)						(in thousands)
Operating lease cost	$	235		$	258		$	636		$	703
Short-term lease cost		4			4			10			11
Variable lease cost		29			44			53			132
Sublease income		(54	)		(53	)		(163	)		(162	)
Total lease cost	$	214		$	253		$	536		$	684

Net cash outflows associated with operating leases totaled

$243,000

and

$253,000

in the

three

months ended

September 30,

2020

and

2019

, respectively, and

$717,000

and

$740,000

in the

nine

months ended

September 30,

2020

and

2019

, respectively.