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.

Operating lease obligations

On November 1, 2013, the Company entered into a 7-year lease for office space in Bedminster, New Jersey which commenced in June 2014 at a monthly rent of approximately $13,000, increasing to approximately $14,000 per month toward the end of the term.

On September 23, 2020, the Company entered into an amendment to the Bedminster lease. Pursuant to the amendment, the Company leased an additional 3,034 rentable square feet (“Expansion Premises”). The amendment became effective upon delivery to the Company of the Expansion Premises, which occurred on August 1, 2021, and extends the term of the lease for seven years from such date. There is no renewal option, no security deposit, no residual value or significant restrictions or covenants other than those customary in such arrangements. Except as expressly provided, all other terms, covenants, conditions and agreements as set forth in the lease will remain unchanged and in full force and effect.

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 did not provide an implicit rate that can readily be determined. Therefore, the Company uses a discount rate based on its incremental borrowing rate.

The Company incurred lease expense for its operating leases of approximately $219 thousand and $626 thousand for the three and nine months ended September 30, 2021, respectively, and approximately $203 thousand and $610 thousand for the three and nine months ended September 30, 2020. The Company incurred amortization expense on its operating lease right-of-use assets of approximately $125 thousand and $368 thousand for the three and nine months ended September 30, 2021, respectively, and approximately $122 thousand and $360 thousand for the three and nine months ended September 30, 2020, respectively.

The Company incurred interest expense on its finance leases of approximately $1 thousand and $3 thousand for the three and nine months ended September 30, 2021, respectively, and approximately $1 thousand and $5 thousand for the three and nine months ended September 30, 2020, respectively. The Company incurred amortization expense on its finance lease right-of-use assets of approximately $9 thousand and $29 thousand for the three and nine months ended September 30, 2021, respectively, and approximately $9 thousand and $50 thousand for the three and nine months ended September 30, 2020, respectively.

The following table presents information about the amount and timing of liabilities arising from the Company’s operating leases and finance leases as of September 30, 2021:

 Schedule of Maturity of Operating and Finance Leases Liabilities

The following table presents information about the amount and timing of liabilities arising from the Company’s operating leases, excluding the Expansion Premises which the Company had not taken control of as of December 31, 2020, and finance leases as of December 31, 2020: