6. COMMITMENTS AND CONTINGENCIES Operating Lease Commitment On August 21, 2017, the Company entered into a lease agreement (August 2017 Lease Agreement) for commercial lease of office space, pursuant to which the Company agreed to lease 32,733 square feet of office space (Leased Premises). The initial term of the August 2017 Lease Agreement was for a period of seven years which began with the Companys occupancy of the Leased Premises in February 2018. The base rent for the Leased Premises ranged from approximately $ 470,000 for the first year to approximately $ 908,000 for the seventh year. Per the terms of the August 2017 Lease Agreement, the landlord agreed to reimburse the Company for $ 1,080,189 of leasehold improvements. The reimbursements had been deferred and were to be recognized as a reduction of rent expense over the term of the lease. Additionally, the August 2017 Lease Agreement required a standby irrevocable letter of credit of $ 400,000 , which was to be reduced, if the Company is not in default under the August 2017 Lease Agreement, to $ 300,000 and $ 200,000 on the third and fourth anniversary of the commencement date, respectively, The Company entered into an unsecured letter of credit for $ 400,000 in connection with the August 2017 Lease Agreement. The Company adopted ASU 2016-02, Leases (Topic 842), as amended (ASU 2016-02) using the effective date method as of January 1, 2019 and recorded a lease liability of approximately $ 3,811,000 , and a right-of-use asset of approximately $ 2,400,000 , with no operations adjustment to the accumulated deficit related to the Leased Premises. Operating leases are included in operating lease right-of-use assets (ROU), operating lease liabilities, current and operating lease liabilities, noncurrent in the Companys condensed consolidated balance sheets. ROU assets represent the Companys right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the date of adoption based on the present value of lease payments over the lease term. As the Companys leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments, which was 9 %. This is the rate the Company would have to pay if borrowing on a collateralized basis over a similar term to each lease. The ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. On February 26, 2019, the Company amended its lease (February 2019 Lease Agreement) pursuant to which an additional 30,023 square feet of office space (New Premises) will be leased by the Company in the same building for an aggregate total of 62,756 square feet of leased office space (Total Premises). Per ASC 842, the February 2019 Lease Agreement constitutes a modification as it extends the original lease term and increases the scope of the lease (additional space provided under the amendment), which requires evaluation of the remeasurement of the lease liability and corresponding ROU asset. Accordingly, the Company reassessed the classification of the Leased Premises and remeasured the lease liability on the basis of the extended lease term using the 20 additional monthly rent payments and the incremental borrowing rate at the effective date of the modification of 9%. The remeasurement for the modification resulted in an increase to the lease liability and the ROU asset of approximately $ 855,000 . The Company determined that the New Premises will be treated as a new standalone operating lease under ASC 842 and recorded a lease liability and a right-of-use asset of approximately $ 2,700,000 for this lease. On October 25, 2019, the Company amended its lease (October 2019 Lease Amendment) pursuant to which the term of the lease was extended through November 30, 2026 and the existing office space under lease was expanded by 500 square feet for an aggregate total of 63,256 square feet of leased office space (Amended Total Premises). The October 2019 Lease Amendment constitutes a modification as it extends the original lease term and increases the scope of the lease (additional space provided under the amendment), which requires evaluation of the remeasurement of the lease liability and corresponding ROU asset. The additional space did not result in a separate contract as the rent increase was determined not to be commensurate with the standalone price for the additional right of use. Accordingly, the Company reassessed the classification of the Amended Total Premises, which resulted in operating classification, and remeasured the lease liability on the basis of the extended lease term using the additional monthly rent payments and the incremental borrowing rate at the effective date of the modification of 8 %. The remeasurement for the modification resulted in an increase to the lease liability and the ROU asset of approximately $ 381,000 that was recorded in the fourth quarter of 2019. The following table contains a summary of the lease costs recognized and other information pertaining to the Companys operating leases for the year ended December 31, 2019: Schedule of Lease Costs Lease cost Operating lease cost $ 1,025,899 Total lease cost $ 1,025,899 Other information Operating cash flows received for operating leases $ 338,435 Weighted average remaining lease term 6.9 years Weighted average discount rate 8.00 % Total lease expense for the three months ended June 30, 2020 and 2019 was $ 310,119 and $ 307,182 , respectively. Total lease expense for the six months ended June 30, 2020 and 2019 was $ 620,237 and $ 507,344 , respectively. Pursuant to the terms of our non-cancelable lease agreements in effect at June 30, 2020, the following table summarizes our maturities of operating lease liabilities as of June 30, 2020: Schedule of Maturities of Operating Lease Liabilities June 30, 2020 2020 (Remainder of year) $ 714,603 2021 1,605,121 2022 1,652,563 2023 1,700,005 2024 1,747,447 Thereafter 3,483,034 Total lease payments $ 10,902,772 Less: imputed interest (2,420,027 ) Total $ 8,482,746 Capital Lease Commitment The lease payments under the capital lease agreement for the copier machine commenced when the machine was placed in service in January 2016. The lease was for a three-year term that concluded in January 2019 and included a bargain purchase option at the end of the term. For commitments under the Companys development award agreements see Note 9. COVID-19 In response to the spread of COVID-19, the Company has taken temporary precautionary measures intended to help minimize the risk of the virus to its employees and community, including temporarily requiring employees to work remotely, implementing remote monitoring procedures for clinical data and suspending all non-essential travel worldwide for its employees. As a result of the COVID-19 pandemic, the Company may experience disruptions that could adversely impact its business. The COVID-19 pandemic may negatively affect clinical site initiation, patient recruitment and enrollment, patient dosing, distribution of drug to clinical sites and clinical trial monitoring for the Companys clinical trials. The COVID-19 pandemic may also negatively affect the operations of the third-party contract research organizations that the Company relies upon to assist it in conducting its clinical trials and the contract manufacturers who manufacture the Companys drug candidates. The Company is continuing to assess the potential impact of the COVID-19 pandemic on its business and operations.