Leases

9 Months Ended

Sep. 30, 2020

9. Leases

We account for leases in accordance with ASC Topic 842: Leases.

We enter into lease agreements for the use of real estate space and certain other equipment under operating leases and we have no financing leases. Our leases are included in Right-of-use-assets and Lease liabilities in our Condensed Consolidated Balance Sheet. Our leases have remaining lease terms of one year to seven years, some of which include options to extend. The majority of our leases with options to extend provide for extensions of up to five years with the ability to terminate the lease within one year. Our right-of-use-asset and lease liability was higher at September 30, 2020 compared to December 31, 2019 due to the extension of one of our leases. On February 28, 2020, we entered into an amendment to extend the lease on our facility in Ithaca, New York, which resulted in recording an additional right-of-use-asset and lease liability of $1.5 million. The lease, which was last amended on January 14, 2016, was scheduled to expire on May 31, 2021. The lease amendment provides for an extension of the lease for four additional years from June 1, 2021 to May 31, 2025. Lease expense is recognized on a straight-line basis over the lease term.

Operating lease expense for the three months ended September 30, 2020 and 2019 was $243 thousand and $256 thousand, respectively, and are reported as “Cost of sales”, “Engineering, design and product development expense”, “Selling and marketing expense”, and “General and administrative expense” in the Condensed Consolidated Statements of Operations. Operating lease expense for the nine months ended September 30, 2020 and 2019 was $735 thousand and $764 thousand, respectively. Operating expenses include short-term lease costs which were immaterial during the period.

The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands):

	Nine Months Ended September 30,
	2020		2019
Operating cash outflows from leases	$	779	$	772

The following summarizes additional information related to our leases as of September 30, 2020:

	September 30, 2020			December 31, 2019
Weighted average remaining lease term (in years)		5.1			5.0
Weighted average discount rate		4.1	%		3.7	%

The maturity of the Company’s operating lease liabilities as of September 30, 2020 and December 31, 2019 were as follows (in thousands):

	September 30, 2020		December 31, 2019
2020	$	261	$	1,042
2021		969		711
2022		876		434
2023		711		268
2024		715		273
Thereafter		800		616
Total undiscounted lease payments		4,332		3,344
Less imputed interest		422		295
Total lease liabilities	$	3,910	$	3,049