(

)

Lease

The Company adopted the new lease standard on

January 1, 2019

using the cumulative-effect method. Prior periods were

not

retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods.

The Company determines if an arrangement is a lease at inception by assessing whether it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company’s operating lease is primarily related to a property lease for its laboratory and corporate offices. BioCardia’s lease agreement does

not

contain any material residual guarantees or material restrictive covenants, nor does it contain an additional lease extension.

ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company’s lease does

not

provide an implicit rate. The Company used an adjusted historical incremental borrowing rate, based on the information available at the approximate lease commencement date, to determine the present value of lease payments. The net lease asset was adjusted for deferred rent, lease incentives, and prepaid rent. Variable rent expense is made up of expenses for common area maintenance and shared utilities and were

not

included in the determination of the present value of lease payments. The Company has

finance leases. The new lease standard did

not

materially impact its condensed consolidated statements of operations.

The components of lease expense for the year ended

December 31, 2019

was as follows (in thousands, except years and percentages):

	December 31,
	2019
Straight-line rent expense recognized for operating lease	$	601
Variable rent expense recognized for operating lease		264
Total rent expense	$	865

Weighted average remaining lease term (in years)		2.0
Weighted average discount rate		12.05	%

Supplemental cash flow information related to the operating lease was as follows (in thousands):

	December 31,
	2019
Cash paid for amounts included in the measurement of lease liabilities	$	612
Cash lease expense (imputed interest expense component of net income)	$	161

Future minimum lease payments under the operating lease as of

December 31, 2019

are as follows (in thousands):

For the years ended December 31,	2019
2020	$	630
2021		649
Total undiscounted lease payments		1,279
Less imputed interest		137
Total operating lease liabilities	$	1,142

Prior to the Company’s adoption of the new lease standard, future minimum lease payments as of

December

31,

2018,

which were undiscounted, were as follows (in thousands):

For the years ended December 31,	2018
2019	$	612
2020		630
2021		649
Total undiscounted lease payments	$	1,891

Prior to the Company’s adoption of the new lease standard, rent expense was recognized on a straight-line basis over the life of the lease. Rental expense was approximately

$601,000

for both years ended

December 31, 2018

and

2017.