12.Leases

In April 2014, the Company entered into a five-year lease agreement for administrative office space located in Bellaire, Texas. The term of the lease began on August 1, 2014 and was set to expire on July 31, 2019; however, in May 2019, we entered into an amendment to the lease agreement to extend the term of the lease for a period of five years, beginning on August 1, 2019 and ending on October 31, 2024.

In April 2016, the Company entered into a three-year lease agreement for lab space located in Bellaire, Texas that required Bio-Path to pay $2,500 per month over the term of the lease. The term of lease began on May 1, 2016 and was set to expire on April 30, 2019; however, in December 2018, we entered into an amendment to the lease agreement to extend the term for a period of three years, beginning on May 1, 2019 and ending on April 30, 2022. The amendment also amended the monthly rent from $2,500 per month to $2,575 per month over the term of the lease.

At the inception of an agreement, the Company determines if the agreement is a lease based on the unique facts and circumstances in each agreement. Lease classification, recognition, and measurement are then determined at the lease commencement date. For agreements that contain a lease, we identify lease and non-lease components, determine the consideration in the contract, determine whether the lease is an operating or financing lease and recognize ROU assets and lease liabilities. Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable so we use an incremental borrowing rate based on the information available at the lease commencement date, which represents an estimated rate that would be incurred to borrow over a similar term in a similar economic environment. The weighted average incremental borrowing rate utilized on our lease liabilities as of December 31, 2019 was 8.0%.

Our current leases include options to renew which can impact the lease term. The exercise of these options is at the Company's discretion and we do not include any of these options within the expected lease term as we are not reasonably certain we will exercise these options. Fixed lease payments on operating leases are recognized over the expected term of the lease on a straight-line basis within our consolidated financial statements. Our leases are included in ROU assets, current portion of lease liabilities and noncurrent lease liabilities in our consolidated balance sheet for the year ended December 31, 2019.

The following table summarizes our operating lease assets and liabilities as of December 31, 2019:


	ROU Assets
	and
	Liabilities
	(in thousands)
Assets:
Operating lease assets	$	367

Liabilities:
Current portion of lease liabilities		85
Noncurrent lease liabilities		330
Total operating lease liabilities	$	415

The following table summarizes our lease related costs for the year ended December 31, 2019:


	Lease Costs
	(in thousands)
Operating lease costs	$	114
Variable lease costs		6
Total lease costs	$	120

The Company made cash payments for its operating leases of $0.1 million for the year ended December 31, 2019. The Company recognized $0.3 million in 2019 for ROU assets and corresponding lease liabilities related to the amendment of our office lease in addition to the $0.1 million recognized upon adoption of the new lease standard on January 1, 2019 (See Note 2). Additionally, the Company recognized $31,000 of non-cash leasehold improvements for the year ended December 31, 2019.

The following table summarizes our expected minimum lease payments as of December 31, 2019:


As of December 31, 2019
(in thousands)
2020	$	115
2021		117
2022		98
2023		89
2024 and thereafter		76
Future minimum lease payments		495
Less: Interest		(80)
Present value of operating lease liabilities	$	415

As of December 31, 2019, the weighted average remaining lease term was 4.4 years.

ASC 840 Disclosures

The following table summarizes our expected minimum lease payments as of December 31, 2018:


As of December 31, 2018
(in thousands)
2019	$	82
2020		31
2021		31
2022		10
Future minimum lease payments	$	154

The Company recognized $120,000 in rent expense for office and lab space for the year ended December 31, 2019.