The Company has operating leases for facilities and finance leases for office equipment. Leases with an initial term of 12 months or less are not recorded in the balance sheet. The Company determines if an arrangement is a lease at inception of a contract.

Right of Use (“ROU”) assets represent the Company's right to use an underlying asset during the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the net present value of fixed lease payments over the lease term. The Company's lease term is deemed to include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. ROU assets also include any advance lease payments made and exclude lease incentives. As most of the Company's operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments on a collateralized basis. Finance lease agreements generally include an interest rate that is used to determine the present value of future lease payments. Operating fixed lease expense and finance lease depreciation expense are recognized on a straight-line basis over the lease term.

The Company's lease cost for the nine months ended September 30, 2020 and 2019, respectively, included the following components:

	Nine Months Ended September 30,
	2020		2019
Operating lease costs	$	538	$	673
Short-term lease costs		77		71
Variable lease costs		2		19
Amortization of finance lease assets		59		78
Interest on finance lease liabilities		6		6
Total lease cost	$	682	$	847

The table below summarizes the Company's scheduled future minimum lease payments under operating and finance leases recorded on the balance sheet as of September 30, 2020:

Year	Operating Leases			Finance Leases
2020	$	48		$	19
2021		472			73
2022		558			48
2023		569			32
2024		581			21
Thereafter		3,174			0
Total minimum payments required		5,402			193
Less: amount representing interest		1,197			11
Present value of net minimum lease payments		4,205			182
Less: current maturities of lease obligations		(177	)		(71	)
Long-term lease obligations	$	4,028		$	111

The weighted average remaining lease terms and discount rates for all the Company’s operating and finance leases were as follows as of September 30, 2020:

		September 30, 2020
Weighted-average remaining lease term - finance leases		3.1 years
Weighted-average remaining lease term - operating leases		9.8 years
Weighted-average discount rate - finance leases		4.0%
Weighted-average discount rate - operating leases		5.0%

The table below presents supplemental cash flow information related to leases during the nine months ended September 30, 2020 and 2019, respectively:

	Nine Months Ended September 30,
	2020			2019
Cash paid for (received) amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	262		$	684
Operating cash flows from tenant improvements incentives from operating leases	$	(1,004	)	$	0
Operating cash flows for finance leases	$	6		$	6
Financing cash flows for finance leases	$	59		$	79

The following table summarizes the classification of ROU assets and lease liabilities as of September 30, 2020 and December 31, 2019:

Leases	Consolidated Balance Sheet Classification	September 30, 2020		December 31, 2019
Assets:
Operating right-of-use assets	Other noncurrent assets	$	2,317	$	2,696
Finance right-of-use assets	Other noncurrent assets		175		234
Total leased assets		$	2,492	$	2,930
Liabilities:
Current
Operating lease liabilities	Accrued liabilities	$	177	$	282
Finance lease liabilities	Accrued liabilities		71		77
Noncurrent
Operating lease liabilities	Long-term liabilities		4,028		3,021
Finance lease liabilities	Long-term liabilities		111		164
Total lease liabilities		$	4,387	$	3,544

In January 2019, the Company entered into an eleven-year lease ending February 28, 2031 for 21,030 square feet of office space in Clarksburg, Maryland for the Company’s test & measurement product line. The Company moved the operations for its test & measurement product line from its Germantown, Maryland office to the new office in January 2020. The Company recognized a present value right of use asset of $2.1 million in August 2019, which was the lease commencement date for accounting purposes. The present value of the right of use asset reflects 14 months of rent abatement and $1.5 million in tenant improvement incentives in the form of cash reimbursements which the Company fully utilized.

In July 2020, the Company signed a one-year lease renewal for its engineering design center in Beijing, China. Under the new lease, the square footage was reduced from 11,210 square feet to 5,393 square feet. The lease period ends on June 14, 2021 and the total lease obligation is approximately $0.1 million.

On March 5, 2020, PCTEL (Tianjin) Wireless Telecommunications Products, Co. Ltd., a wholly-owned subsidiary of the Company (“PCTEL Tianjin”), entered into a letter agreement with Wang Zhuang Village Committee of Tianjin, China (the “Letter Agreement”) specifying the terms for extension of the lease of the premises on which PCTEL Tianjin currently conducts its manufacturing activities in Tianjin, China (the “Tianjin Lease”) to October 2022. The Letter Agreement did not, however, effect the lease extension. The Tianjin Lease expired on October 8, 2020 without extension. On October 16, 2020, the Wang Zhuang Village Committee issued a notice informing PCTEL Tianjin that the Chinese Party Central Committee and the State Council are accelerating the layout optimization and transformation of the industrial park in which the leased premises is located, and accordingly leases and lease extensions for all premises in the industrial park have been suspended and rent collection has been postponed. The letter indicates that if the Tianjin Lease extension is subsequently approved, the rent for the period from October 9, 2020 to the date of the Tianjin Lease extension (the “Intervening Period”) will then be due and payable. If the Tianjin Lease extension is not approved, PCTEL Tianjin will need to vacate the premises and no rent will be due for the Intervening Period. PCTEL Tianjin has not received an indication of the likelihood of approval of the Tianjin Lease extension, the length of the Intervening Period or the notice period for vacating the leased premises; provided, however, based upon past practices and verbal assurances, the Company believes that PCTEL Tianjin will have not less than 30 days to vacate the leased premises if the Lease Extension is not approved. See risk factors in Section IA for additional information on the Tianjin lease. See the risk factors in Part II, Item 1A for additional information.