As described above in Note 10, Recent Accounting Pronouncements, the Company adopted Topic 842 as of January 1, 2019. Prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 840.

The Company leases facilities and certain equipment under noncancelable operating leases with remaining lease terms of 1 year to 7 years, one of which includes an option to extend the lease for one five-year term. This optional period was not considered in the determination of the right-of-use asset or the lease liability as the Company did not consider it reasonably certain that it would exercise such option.

Operating lease costs were $1.3 million and $1.0 million for the three months ended March 31, 2019 and 2018, respectively. Cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2019 was $1.1 million and was included in net cash used in operating activities in the Company’s Condensed Consolidated Statements of Cash Flows.

The balance sheet classification of the Company’s lease liabilities was as follows (in thousands):

	March 31, 2019		December 31, 2018
Operating lease liabilities
Current portion included in accrued liabilities	$	4,468	$	-
Operating lease liabilities		6,754		-
Total operating lease liabilities	$	11,222	$	-

	Operating Leases
Remainder of 2019	$	3,488
Years ending December 31,
2020		3,132
2021		2,232
2022		1,653
2023		909
Thereafter		1,932
Total lease payments		13,346
Less:
Imputed interest		(2,124	)
Total operating lease liabilities	$	11,222

Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company uses its incremental borrowing rate based on the information available at the lease commencement date. As of March 31, 2019, the weighted average remaining lease term is 4.7 years and the weighted average discount rate used to determine the operating lease liability was 8.0%.

In the fourth quarter of 2018, the Company entered into an agreement to lease approximately 67,020 square feet of corporate office space in San Diego, California with total minimum lease payments of $53.7 million over an initial term of 10 years and 9 months. As of March 31, 2019, the lease had not yet commenced. This operating lease is expected to commence around the first half of fiscal year 2020, but may commence earlier if the lessor makes the space available for use earlier than anticipated. In connection with this lease agreement, the Company established a letter of credit for $2.2 million, which has automatic annual extensions and is fully secured by restricted cash.