LEASES

9 Months Ended

Sep. 30, 2021

8. LEASES:

The Company has entered into operating leases to facilitate the expansion of its manufacturing, research and development, and selling, general and administrative activities. For purposes of calculating operating lease liabilities, lease terms may be deemed to include options to extend or terminate the lease when those events are reasonably certain to occur. The interest rate implicit in lease contracts is typically not readily determinable and as such the Company uses the appropriate incremental borrowing rate based on information available at the lease commencement date in determining the present value of the lease payments. Current lease agreements do not contain any residual value guarantees or material restrictive covenants. As of September 30, 2021, the Company did not have any finance leases and no additional operating leases that have not yet commenced.

The following table presents the Company’s operating lease cost and supplemental cash flow information related to the Company’s operating leases (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Operating lease cost	$	1,163	$	537	$	2,536	$	1,609
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	16,103	$	—	$	26,174	$	—

The increase in right-of-use assets obtained in exchange for lease obligations for the three and nine months ended September 30, 2021 was primarily due to the commencement of the operating lease related to expansion of the Adesis research facilities in Wilmington, Delaware.

The following table presents the Company’s operating right-of-use assets and liabilities (in thousands):


	September 30, 2021		December 31, 2020
Right-of-use assets	$	31,627	$	8,750
Short-term lease liabilities		3,111		1,871
Long-term lease liabilities		28,516		6,879

The following table presents weighted average assumptions used to compute the Company’s right-of-use assets and lease liabilities:


	September 30, 2021
Weighted average remaining lease term (in years)		8.8
Weighted average discount rate		2.8	%

As of September 30, 2021, current operating leases had remaining terms between eleven months and ten years with options to extend the lease terms.

Undiscounted future minimum lease payments as of September 30, 2021, by year and in the aggregate, having non-cancelable lease terms in excess of one year were as follows (in thousands):


	Maturities of Operating Lease Liabilities
2021 (1)	$	771
2022		4,111
2023		4,032
2024		3,980
2025		4,022
Thereafter		18,656
Total lease payments		35,572
Less: Imputed interest		(3,945	)
Present value of lease payments	$	31,627

(1)

Scheduled maturities of lease liabilities represent the period from October 1, 2021 to December 31, 2021.