NOTE 3 — LEASES

As discussed in Note 1, the Company adopted ASU 2016-02, Leases (Topic 842) effective July 1, 2019. As of July 1, 2019, the Company had two leases in effect, consisting of (i) a lease for its headquarters location in Redwood City, California that was entered into on January 25, 2019, that provides for monthly rent of approximately $21,000 through the expiration date in March 2022, and (ii) a lease for office space in Bend, Oregon entered into on February 7, 2019, that provides for monthly rent of approximately $2,700 through the expiration date in February 2021. The impact of adoption of ASU 2016-02 resulted in the recognition of ROU assets for $0.6 million and operating lease liabilities for the discounted present value of the future lease payments on these leases of approximately $0.6 million. For the year ended June 30, 2020, under ASC 842 the Company had operating lease expense of $0.3 million, of which $0.2 million was included in research and development costs and $0.1 million was included in general and administrative expenses. For the year ended June 30, 2019 under the previous accounting standard, the Company had operating lease expense of $0.4 million, of which $0.3 million was included in research and development costs and $0.1 million was included in general and administrative expenses.

The Company determined the operating lease liability of approximately $633,000 as of July 1, 2019 based upon a discount rate of 10.0% and assuming that the Company will not exercise its option to extend the headquarters lease for an additional three years. The discount rate represents the Company's estimated incremental borrowing rate for debt with similar lender rights as the underlying operating lease terms.

Balance Sheet Presentation

As of June 30, 2020 and on the adoption date of July 1, 2019, the carrying value of ROU assets and operating lease liabilities were as follows (in thousands):

As of June 30, 2020, the weighted average remaining lease term under operating leases was 1.6 years, and the weighted average discount rate for operating lease liabilities was 10.0%. For the year ended June 30, 2020, cash paid for amounts included in the measurement of operating lease liabilities amounted to $0.3 million, which is included in the determination of net cash used in operating activities in the consolidated statement of cash flows.

Future Lease Payments

Future payments under operating lease agreements as of June 30, 2020 are as follows (in thousands):

Restructuring Activity

In April 2018, the Company implemented a restructuring plan to discontinue manufacturing activities and attempt to sublease facilities in Louisville, Colorado.

In December 2018, the Company vacated its leased office and laboratory space in Colorado, resulting in an impairment charge of approximately $33,000 and a loss on sale of approximately $12,000 related to leasehold improvements, laboratory equipment, furniture, equipment and fixtures.  The impairment charge and the loss on sale are included in facilities and other general and administrative expenses in the accompanying statement of operations for the fiscal year ended June 30, 2019.

In December 2018, the Company entered into surrender agreements with its landlord, sub-landlord and sub-lessees to terminate all lease and sub-lease obligations at the Company's former Colorado facilities. Accordingly, the Company was relieved of its remaining obligations under the leases and relinquished its rights under the lease and sublease agreements whereby no cash was exchanged by the parties and the Company recognized a net gain on lease termination of approximately $0.2 million. This gain is included in interest and other income in the accompanying statement of operations for the fiscal year ended June 30, 2019.