(5) Leases

The Company has operating leases of office, manufacturing and laboratory space, which have remaining lease terms of one to six years and may include one or more options to renew or terminate early.

The Company determines if an arrangement contains a lease at inception. Operating lease right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease payments, initial direct costs paid or incentives received. The Company’s leases do not contain an implicit rate, and therefore the Company uses an estimated incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. Options to extend or terminate the lease are reflected in the calculation when it is reasonably certain that the option will be exercised. The Company has elected to account for lease and non-lease components as a single lease component, however non-lease components that are variable, such as common area maintenance and utilities, are generally paid separately from rent based on actual costs incurred and therefore are not included in the right-of-use asset and operating lease liability and are reflected as an expense in the period incurred. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

During the first quarter of 2019, the Company amended its Hampton, New Jersey lease to eliminate 16,200 square feet of space and extend the remaining 33,400 square feet of space for an additional five-year term with an early termination option after three years. The Company recorded an additional right-of-use asset and lease liability of $1.4 million during the first quarter of 2019 for the initial 3 years related to the amendment.

Operating lease expense was $0.6 million and $1.8 million for the three and nine months ended September 30, 2019, respectively. Variable lease expense was $0.4 million and $1.2 million for the three and nine months ended September 30, 2019, respectively. Operating cash flows used for operating leases during the nine months ended September 30, 2019 was $2.5 million. As of September 30, 2019, the weighted-average remaining lease term was 2 years and the weighted-average discount rate was 11.2%.

Future minimum lease payments under non-cancellable leases as of September 30, 2019 were as follows:


Remainder of 2019	$	524
2020		2,171
2021		508
2022		747
2023		311
Total lease payments		4,261
Less imputed interest		(526)
Present value of operating lease liabilities	$	3,735

Under the prior lease accounting guidance, operating lease obligations, including estimated variable lease obligations, as of December 31, 2018 were as follows:


2019	$	4,648
2020		3,140
Thereafter		—
Total lease payments	$	7,788