The Company has historically entered into lease arrangements for its facilities. As of December 31, 2020, the Company had three operating leases with required future minimum payments. In applying the transition guidance under ASC 842, the Company determined the classification of these leases to be operating leases and recorded right-of-use assets and lease liabilities as of the effective dates. The Company’s leases generally do not include termination or purchase options.

The Company entered into an agreement with an equipment leasing company in the fall of 2018, which provided up to $1.4 million for equipment purchases in the form of sale and leasebacks or direct leases. As of June 30, 2021, the Company had completed the sale and leaseback for four pieces of equipment and is leasing three other items directly from the leasing company. The terms of the leases are three years and afterwards provide for either annual extensions or an outright purchase of the equipment.

The equipment leases require two advance rental payments to be held as security deposits. The security deposits held amounted to approximately $0.1 million as of June 30, 2021 and December 31, 2020. They are included in other non-current assets on the condensed balance sheets.

In December 2020, the Company entered into an operating lease for office space in Birmingham, Alabama, for a 63-month term, ending in March 2026, with an option to extend five years. Throughout the term of the lease, the Company is responsible for paying

certain costs and expenses, in addition to the rent, as specified in the lease, including a proportionate share of applicable taxes, operating expenses and utilities.

In December 2020, the Company entered into an operating lease for laboratory space in Birmingham, Alabama, for a 63-month term, ending in March 2026, with an option to extend five years. Throughout the term of the lease, the Company is responsible for paying certain costs and expenses, in addition to the rent, as specified in the lease, including a proportionate share of applicable taxes, operating expenses and utilities.

The operating leases required security deposits at the inception of the lease. The security deposits amounted to approximately $17,000 for the six months ended June 30, 2021. They are included in non-current assets on the balance sheet.

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s finance and operating leases for the three and six months ended June 30, 2021 (in thousands):


	Three Months Ended June 30, 2021		Six Months Ended June 30, 2021
Lease Cost
Amortization of finance right-of-use assets	$	138	$	250
Interest on finance lease liabilities		25		46
Operating lease cost		53		105
Short-term lease cost		134		249
Variable lease cost		—		—
Total lease cost	$	350	$	650


	June 30, 2021
Other Operating Lease Information
Cash paid for amounts included in the measurement of lease liability – finance leases	$	340
Cash paid for amounts included in the measurement of lease liability – operating leases	$	52
Weighted-average remaining lease term – finance leases		2.0
Weighted-average remaining lease term – operating leases		4.67
Weighted-average discount rate – finance leases		10.2	%
Weighted-average discount rate – operating leases		10.4	%

The following table reconciles the undiscounted cash flows to the operating and financing lease liabilities at June 30, 2021 (in thousands):


	Financing Leases		Operating Leases
Remainder of 2021	$	327	$	105
2022		435		216
2023		253		223
2024		30		230
2025		—		237
Thereafter		—		41
Total lease payment		1,045		1,052
Less: interest		96		219
Total lease liability	$	949	$	833