Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.19.3
Leases
9 Months Ended
Sep. 30, 2019
Leases [Abstract]  
Leases

13. Leases

 

As described in Note 1, effective January 1, 2019, the Company adopted ASC 842 using the optional transition method, applying no practical expedients. In accordance with the optional transition method, the Company did not recast the prior period consolidated financial statements. The lease term is the noncancelable period of the lease. There are no termination provisions or renewal periods reasonably certain of exercise or options controlled by the lessor. Finance leases, variable lease costs and short-term leases are not material to our consolidated financial statements.


The Company leases office space under operating leases. Total lease costs, consisting of fixed operating lease costs, in the three and nine months ended September 30, 2019 amounted to $66,895 and $200,684, respectively.  As of September 30, 2019, lease liabilities have been determined using a discount rate of approximately 8.6%. The rate implicit in the Company’s leases is not readily determinable. Accordingly, the Company uses its estimated incremental borrowing rate, which represents the rate of interest that it would pay to borrow on a collateralized basis over a similar term. As of September 30, 2019, the weighted-average remaining life of the Company’s leases is approximately 3.4 years. Operating cash flows in the three and nine months ended September 30, 2019 include $69,138 and $205,401, respectively, of payments for amounts included in the measurement of operating lease liabilities.


Maturities of operating lease liabilities as of September 30, 2019 were as follows:


Year ending December 31:

 

 

 

October 1 through December 31, 2019

$

28,358

 

2020

 

115,580

 

2021

 

118,158

 

2022

 

120,737

 

2023

 

20,195

 

Total lease payments

 

403,028

 

Less: imputed interest

 

(52,738

)

Present value of operating lease liabilities

$

350,290

 


In April 2019, the Company entered into a 96-month lease for office and laboratory space that commenced upon the expiration of an existing lease in October 2019. Scheduled lease payments under the new lease total approximately $1.8 million. As of September 30, 2019, the Company had not taken control of the space and the lease term had not commenced. Accordingly, no right of use asset or lease liability related to the lease has been recorded as of this date. The Company expects to incur approximately $500,000 of the cost of improvements at commencement of the lease.