12. Commitments and contingencies

Leases

The Company leases real estate assets and equipment, and determination if an arrangement is a lease occurs at inception. For leases with terms greater than 12 months, the Company records a related right-of-use (“ROU”) asset and lease liability at the present value of lease payments over the term. Many leases include fixed rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. The Company’s leases do not provide an implicit rate, and thus the Company estimated the incremental borrowing rate in calculating the present value of the lease payments. The Company has elected not to record a ROU asset and lease obligation for short-term leases (with terms less than 12 months) or separate non-lease components from associated lease components for its real estate lease assets. As a result, all contract consideration is allocated to the single lease component.

The Company’s leases have remaining lease terms of eight years to eighteen years. Some of our leases include one or more options to renew with renewal terms that can extend the lease for additional years, or options to terminate the leases, both at the Company’s discretion. The Company’s lease terms include options to extend or terminate leases when the Company concludes it is reasonably certain that it would exercise those options. Lease expense for minimum lease payments is recognized on a straight-line basis based on the fixed components of a lease arrangement. The Company amortizes this expense over the term of the lease beginning with the date of initial possession, which is the date the Company can enter the leased space and begin to make improvements in preparation for its intended use. Variable lease components represent amounts that are not fixed in nature and are not tied to an index or rate, and are recognized as incurred.

The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet as of March 31, 2021:


	Twelve Months Ended
	March 31,
	2021		2020
Lease cost
Finance lease costs:
Amortization of right-to-use asset	$	2,428	$	1,274
Interest on lease liabilities		2,242		1,185
Operating lease costs		948		885
Total lease cost	$	5,618	$	3,344

For the years ended March 31, 2021 and 2020, the Company incurred finance lease amortization costs of $2,428 and $1,274, respectively, of which $2,070 and $1,034 are recognized in research and development expenses. In addition, the Company incurred interest expense on finance leases of $2,242 and $1,185, of which $1,881 and $944 are recognized in research and development expenses for the years ended March 31, 2021 and 2020, respectively. For the years ended March 31, 2021 and 2020, the Company recognized $948 and $885, respectively, of operating lease costs within general and administrative expenses. The following table summarizes the maturity of the Company's lease liabilities on an undiscounted cash flow basis and a reconciliation to the operating and financing lease liabilities recognized on our balance sheet as of March 31, 2021:


	March 31, 2021
	Operating leases		Financing lease		Total
2022	$	970	$	2,487	$	3,457
2023		980		2,562		3,542
2024		989		2,639		3,628
2025		998		2,718		3,716
2026		1,008		2,799		3,807
Thereafter		4,066		40,905		44,971
Total lease payments		9,011		54,110		63,121
Less: interest		2,963		26,878		29,841
Total lease liabilities	$	6,048	$	27,232	$	33,280

The following table provides lease disclosure as of and for the year ended March 31, 2021:


	March 31, 2021			March 31, 2020
Leases
Right-to-use operating lease asset	$	5,751		$	4,425
Right-to-use finance lease asset		44,522			46,925
Total lease assets	$	50,273		$	51,350

Operating lease liabilities, current	$	970		$	873
Finance lease liabilities, current		2,487			2,411
Operating lease liabilities, non-current		5,078			3,737
Finance lease liabilities, non-current		24,745			24,967
Total lease liabilities	$	33,280		$	31,988
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	823		$	747
Operating cash flows from finance leases	$	2,240		$	1,185
Financing cash flows from finance leases	$	145		$	59
Right-to-use asset obtained in exchange for new operating lease liabilities				$	5,152
Right-to-use asset obtained in exchange for new financing lease liabilities	$	—		$	48,224
Weighted-average remaining lease term-operating leases		8.9 years			8.7 years
Weighted-average remaining lease term-financing leases		18.3 years			19.3 years
Weighted-average discount rate-operating leases		9.8	%		7	%
Weighted-average discount rate-financing leases		8.3	%		8	%

The variable lease costs and short-term lease costs were insignificant for the years ended March 31, 2021 and 2020, respectively.

Manufacturing commitments

The Company has entered into an agreement with a contract manufacturing organization to provide clinical trial products. As of March 31, 2021 and 2020, the Company had committed to minimum payments under these arrangements totaling $1,651 and $3,569 through March 31, 2021.

Indemnification agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its executive management team and its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and therefore it has not accrued any liabilities related to such obligations in its consolidated financial statements as of March 31, 2021 or 2020.

Legal proceedings

The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities.