Note 8 – Leases

The Company has various lease agreements with terms up to 10 years, including leases of office space, a laboratory and manufacturing facility, and various equipment. Some leases include purchase, termination or extension options for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

The assets and liabilities from operating and finance leases are recognized at the lease commencement date based on the present value of remaining lease payments over the lease term using the Company’s incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, the Company uses a discount rate based on its incremental borrowing rate, which is determined using the average of borrowing rates explicitly stated in the Company’s finance leases.

The Company incurred lease expense for its operating leases of approximately $814 thousand and $745 thousand for the years ended December 31, 2019 and 2018, respectively.

The Company incurred interest expense on its finance leases of approximately $12 thousand and $13 thousand for the years ended December 31, 2019 and 2018, respectively. The Company incurred amortization expense on its finance lease right-of-use assets of approximately $123 thousand and $104 thousand for the years ended December 31, 2019 and 2018, respectively.

The following table presents information about the amount and timing of liabilities arising from the Company’s operating and finance leases as of December 31, 2019 (in thousands):

The following table presents a summary of future minimum lease payments arising from the Company’s operating leases as of December 31, 2018 (in thousands):