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Leases | 3 Months Ended
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Mar. 31, 2019
Leases [Abstract] |
Leases |
8. | Leases
Effective January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach through a cumulative-effect adjustment and utilizing the effective date as its date of initial application, with prior periods unchanged and presented in accordance with the previous lease accounting guidance. Upon adoption, the Company recorded right-of-use assets of $2,026 and lease liabilities of $2,538, of which $1,925 was classified as non-current and $613 as current. The difference between the value of the right-of-use asset and the lease liabilities relates to $512 of net deferred, accrued and prepaid rent that was reclassified against the right-of-use asset upon adoption of ASC 842 on January 1, 2019. The Company has lease agreements for its facilities in Cambridge, Massachusetts, which is the Company’s global headquarters, Vienna, Austria, which is the Company’s research and development center, and Waltham, Massachusetts, which is the former headquarters of Arsanis. The Company plans to sublease its Waltham, Massachusetts facility. There are no restrictions or financial covenants associated with any of the lease agreements. Cambridge Lease In August 2017, the Company entered into a lease agreement for office space of approximately thirteen thousand square feet in Cambridge, Massachusetts (“Cambridge Lease”) which expires on July 31, 2022. The Cambridge lease includes an annual rent escalation clause and the Company has the option to extend the lease for one period of five additional years. Base rent is approximately $810 annually and the monthly rent expense is being recognized on a straight-line basis over the term of the lease. In addition to the base rent, the Company is also responsible for its share of operating expenses, electricity and real estate taxes, in accordance with the terms of lease. These costs are classified as variable lease payments and are not included in the determination of the leases’ right-of-use operating assets or lease operating liabilities. Waltham Lease On March 13, 2019, as part of its Merger with Arsanis, the Company acquired an operating lease for approximately six thousand square feet of office space in Waltham, Massachusetts (“Waltham Lease”). The Waltham lease, as amended, commenced on January 1, 2019, and expires approximately 5 years from the commencement date. The base rent is approximately $459 annually. In addition to the base rent, the Company is also responsible for its share of operating expenses, electricity and real estate taxes, in accordance with the terms of the Amended Lease Agreement. These costs are classified as variable lease payments and are not included in the determination of the leases’ right-of-use assets or lease liabilities. Vienna Lease On March 13, 2019, as part of its Merger with Arsanis, the Company acquired an operating lease for approximately four hundred square meters of laboratory and office space in Vienna, Austria, which commenced on March 1, 2019, as amended, for a term of two years. The lease is cancellable by the Company upon three month’s notice with no penalty. The annual base rent is approximately $155. The Company has classified this lease as a short-term lease as it is not reasonably certain that the Company with not terminate the lease within one year and, accordingly, has not recorded a right-of-use asset. Accordingly, rent expense is recorded on a straight-line basis as incurred over the term of the lease. As the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in calculating the present value of the lease payments. The Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The components of lease expense for the three months ended March 31, 2019 were as follows:
Lease Cost |  | For the three months ended March 31, 2019 |
Fixed operating lease cost |  | $ | 187 |
Short-term lease costs |  |  | 8 |
Total lease expense |  | $ | 195 |
Other information |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash flows from operating leases |  | $ | 201 |
Leased assets obtained in exchange for new operating lease liabilities (1) |  | $ | 781 |
Weighted-average remaining lease term—operating leases |  |  | 3.9 years |
Weighted-average discount rate—operating leases |  |  | 9.0 | %
(1) | Acquired in Merger with Arsanis
Maturities of lease liabilities due under these lease agreements as of March 31, 2019 are as follows:
Maturity of lease liabilities |  | Operating Leases |
2019 (remainder of 2019) |  | $ | 837 |
2020 |  |  | 1,281 |
2021 |  |  | 1,304 |
2022 |  |  | 970 |
2023 |  |  | 489 |
Thereafter |  |  | — |
Total lease payments |  |  | 4,880 |
Less: interest |  |  | (764 | )
Total operating lease liabilities as of March 31, 2019 |  | $ | 4,116 |
The Company adopted ASU 2016-02 on January 1, 2019 as noted above, and as required, the following disclosure is provided for periods prior to adoption. Future annual minimum lease payments due under the Company’s operating leases as of December 31, 2018 were as follows:
Year Ending December 31, |  | Operating Leases |
2019 |  | $ | 810 |
2020 |  |  | 823 |
2021 |  |  | 835 |
2022 |  |  | 492 |
Total |  | $ | 2,960 |

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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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