Note 8 – Leases

The Company has various lease agreements , 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 implicit rates, therefore the Company utilized a discount rate based on its incremental borrowing rate to record the lease obligations. The Company’s finance leases provide readily determinable implicit rates.

Operating lease obligations

On September 13, 2022, the Company entered into an amendment to the operating lease agreement for its administrative office space in Bedminster, New Jersey which extends the term of the lease until June 30, 2029. Before this amendment, the lease term was scheduled to expire on July 31, 2028. (See Note 8 – Leases within the Company’s Notes to Consolidated Financial Statements included in the Company’s 2021 Form 10-K.)

The Company incurred lease expense for its operating leases of $194 thousand and $646 thousand for the three and nine months ended September 30, 2022, respectively, and $219 thousand and $626 thousand for the three and nine months ended September 30, 2021, respectively. The Company incurred amortization expense on its operating lease right-of-use assets of $138 thousand and $413 thousand for the three and nine months ended September 30, 2022, respectively, and $125 thousand and $368 thousand for the three and nine months ended September 30, 2021, respectively.

Finance Leases

The Company incurred interest expense on its finance leases of $0 and $1 thousand for the three and nine months ended September 30, 2022, respectively, and $1 thousand and $3 thousand for the three and nine months ended September 30, 2021, respectively. The Company incurred amortization expense on its finance lease right-of-use assets of $3 thousand and $15 thousand for the three and nine months ended September 30, 2022, respectively, and $9 thousand and $29 thousand for the three and nine months ended September 30, 2021, 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, 2022:

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 and finance leases as of December 31, 2021: