In January 2013, the Company executed a non-cancellable lease agreement for office and laboratory space in Palo Alto, California. The lease began in October 2013 and would expire in October 2018. In March 2016, the Company executed a lease amendment which was effective March 2016 and extended the lease term until October 2023.

The Company recognized an operating lease right-of-use asset and corresponding liability on January 1, 2019 based on the present value of remaining lease payments discounted at the Company’s estimated incremental borrowing rate of 8.5% over the remaining lease term of 4.83 years. For the three and six months ended June 30, 2019, the operating lease cost was $0.1 million and $0.3 million, respectively. The operating cash flows used for operating leases was $0.3 million for the six months ended June 30, 2019. The short-term lease costs were immaterial for the three and six months ended June 30, 2019.

The following tables summarize the Company’s future payments under the non-cancellable operating lease (in thousands):

Year ending December 31,	As of June 30, 2019
2019 (excluding the six months ended June 30, 2019)	$	237
2020		581
2021		598
2022		616
2023		526
Total undiscounted lease payments		2,558
Less: imputed interest		(425	)
Total operating lease liabilities	$	2,133

Year ending December 31,	As of December 31, 2018
2019	$	564
2020		581
2021		598
2022		616
2023		526
Total payments	$	2,885

From time to time, the Company may become involved in legal proceedings arising from the ordinary course of its business. Management is currently not aware of any matters that could have a material adverse effect on the Company’s financial position, results of operations or cash flows. The Company records a legal liability when it believes that it is both probable that a liability may be imputed, and the amount of the liability can be reasonably estimated. Significant judgment by the Company is required to determine both probability and the estimated amount.

To the extent permitted under Delaware law, the Company has agreed to indemnify its directors and officers for certain events or occurrences while the director or officer is, or was serving, at the Company’s request in such capacity. The indemnification period covers all pertinent events and occurrences during the director’s or officer’s service. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is not specified in the agreements; however, the Company has director and officer insurance coverage that reduces its exposure and enables the Company to recover a portion of any future amounts paid. The Company believes the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.