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 will be included in the lease term when it is reasonably certain that the option will be exercised. Certain of the Company’s lease agreements contain rent escalation clauses.

Operating and finance leases are presented in the Company’s consolidated balance sheets as right-of-use assets from leases, current lease liabilities and long-term lease liabilities. The assets and liabilities from our 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. As the Company’s operating leases do not provide implicit rates, the Company has utilized its incremental borrowing rate, determined based on the long-term borrowing costs of companies with similar credit profiles, to record its lease obligations. The Company’s finance leases provide readily determinable implicit rates. For operating leases, the Company recognizes the minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement. The Company will amortize this expense over the term of the lease beginning with the lease commencement date.

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, increasing to approximately $14 toward the end of the term. The lease was subsequently amended, including most recently on September 13, 2022 to provide additional space and to extend the term of the lease until June 30, 2029 at a monthly rent of approximately of approximately $20, increasing to approximately $23 toward the end of the term. 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.

On December 15, 2016, the Company entered into a 10-year, 3-month lease of laboratory and manufacturing space in Bridgewater, New Jersey. The lease began August 2017. The monthly rent started at approximately $43, increasing to approximately $64 in the final year. To obtain the lease, the Company provided an initial security deposit of $586 which was subsequently reduced and is currently $200 at December 31, 2022.

The Company incurred lease expense for its operating leases of $872 and $852 for the years ended December 31, 2022 and 2021. The Company incurred amortization expense on its operating lease right-of-use assets of $542 and $501 for the years ended December 31, 2022 and 2021, respectively.

Finance Leases

The Company incurred interest expense on its finance leases of $1 and $3 for the years ended December 31, 2022 and 2021, respectively. The Company incurred amortization expense on its finance lease right-of-use assets of $19 and $36 for the years ended December 31, 2022 and 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 December 31, 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: