Note 10 – Leases

The Company leases office and manufacturing facilities in Hopewell Junction, NY under a non-cancelable operating lease agreement. The lease for these facilities, as amended, expires in May 2024 and does not contain a renewal option. The lease agreement does not contain any residual value guarantees, or material restrictive covenants.

The Company also leases an office facility for its design group in Santa Clara, California. During the fourth quarter of 2019, the Company signed a two-year extension of this lease that expires on October 31, 2021. The lease agreement does not contain any residual value guarantees or material restrictive covenants.

The Company's operating leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date.

The components of lease expense were as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Finance Lease Cost:
Amortization of right-of-use assets	$	4	$	3	$	12	$	7
Interest on lease liabilities		1		1		3		1
Operating lease cost		262		246		786		739
Short-term lease cost		17		14		31		43
Total Lease Cost	$	284	$	264	$	832	$	790


Cash paid for amounts included in the measurement lease liabilities:
Operating cash flows from operating leases	$	266	$	251	$	797	$	751
Financing cash flows from finance leases	$	5	$	5	$	15	$	8
Right-of-use assets obtained in exchange for new finance lease liabilities	$	-	$	-	$	-	$	50
Right-of-use assets obtained in exchange for new operating lease liabilities	$	-	$	-	$	-	$	-


	September 30, 2020		December 31, 2019
Finance lease right-of-use assets	$	28	$	40
Operating lease right-of-use assets	$	3,166	$	3,729
Finance lease liability, current	$	17	$	16
Finance lease liability, non-current	$	11	$	24
Operating lease liabilities, current	$	826	$	775
Operating lease liabilities, non-current	$	2,441	$	3,067
Weighted average remaining lease terms - finance leases		1.58 years		2.33 years
Weighted average remaining lease terms - operating leases		3.67 years		4.42 years
Weighted average discount rate - finance leases		10.91%		10.91%
Weighted average discount rate - operating leases		8.48%		8.48%

Future annual minimum lease payments and finance lease commitments as of September 30, 2020 were as follows (in thousands):


	Operating Leases		Finance Leases
2020 (excluding the nine months ended September 30, 2020)	$	262	$	5
2021		1,037		20
2022		986		8
2023		986		-
2024		411		-
Total undiscounted future minimum lease payments		3,682		33
Less imputed interest		415		5
Lease liability	$	3,267	$	28