Note

- Leases

February 2016,

the FASB issued ASU

2016

02:

Leases (Topic

842

)

. This ASU requires a lessee to recognize a right-of-use asset and a lease liability on its balance sheet for most operating leases. ASU

2016

is effective for annual and interim periods beginning after

December 15, 2018,

including interim periods within those fiscal years. In

July 2018,

the FASB issued ASU

2018

11,

Leases (Topic

842

): Targeted Improvements

, which provides companies with an additional optional transition method to apply the new standard to leases in effect at the adoption date through a cumulative effect adjustment. The Company adopted the new lease standard as of

January 1, 2019

using this optional transition method.

The Company elected the package of practical expedients referenced in ASU

2016

02,

which permits companies to retain original lease identification and classification without reassessing initial direct costs for existing leases. The Company also elected the practical expedient that exempts leases with an initial lease term of

twelve

months or less, as well as the practical expedient that allows companies to select, by class of underlying asset,

not

to separate lease and non-lease components. Adoption of this standard resulted in the recognition of a right-of-use asset and a lease liability on the Company’s

January 1, 2019

Consolidated Balance Sheet of

$3,621

and

$4,822,

respectively. There was

material impact on the Company’s Consolidated Statement of Comprehensive Loss, and the cumulative transition adjustment recorded to retained earnings upon adoption was

$238.

The Company leases certain assets under operating leases, which primarily consisted of real estate leases, laboratory equipment leases and office equipment leases at

December

31,

2018.

Certain operating leases provide for renewal options, which can vary by lease. The right-of-use asset and lease liabilities on the Company’s Consolidated Balance Sheet represent payments over the lease term, which includes renewal options for certain real estate leases that we are likely to exercise. As part of the Company’s assessment of the lease term, the Company elected the hindsight practical expedient, which allows companies to use current knowledge and expectations when determining the likelihood to extend lease options. Renewal options for our leases range from

years in length and begin from

2023

through

2026.

The weighted average lease term for the Company’s operating leases was

13.0

years. The discount rate used in the calculation of the Company’s right-of-use asset and lease liability was determined based on the stated rate within each contract when available, or the Company’s collateralized borrowing rate from lending institutions. The weighted average discount rate for the Company’s operating leases was

12.6%.

The Company has

not

made any residual value guarantees related to its operating leases; therefore, the Company has

corresponding liability recorded on its Consolidated Balance Sheets.

Aggregate lease expense under operating leases was

$1,064

for the

nine

month period ended

September 30, 2019.

Certain operating leases include rent escalation provisions, which the Company recognizes as expense on a straight-line basis. Lease expense for leases with an initial term of

twelve

months or less was

not

material.

Future lease payments for assets under operating leases as of

September 30, 2019,

are as follows:

Remaining Maturities of Lease Liabilities Year Ending December 31,	Operating Leases
2019	$	400
2020		1,450
2021		580
2022		519
2023		512
Thereafter		7,765
Total lease payments		11,226
Less imputed interest		6,231
Total	$	4,995

Of the Company’s total lease liability,

$1,452

is a current liability and

$3,543

is a long-term liability at

September 30, 2019.

The current and long-term portions of the Company’s lease liability are presented within “Accrued expenses” and “Other non-current liabilities” on the Consolidated Balance Sheets. The Company’s right-of use asset balance associated with operating leases totaled

$3,799

September 30, 2019.

This amount is presented within “Other long-term assets” on the Consolidated Balance Sheets.