6. LEASES

The Company has various operating and finance leases for facilities and equipment. Facilities leases provide office, laboratory, warehouse, or land, the Company uses to conduct its operations. Facilities leases range in duration from two to ten years, with either renewal options for additional terms as the initial lease term expires, or purchase options. Facilities leases are considered as either operating or financing leases.

Equipment leases provide for office equipment, laboratory equipment or services the Company uses to conduct its operations. Equipment leases range in duration from 30 to 60 months, with either subsequent annual renewals, additional terms as the initial lease term expires, or purchase options.

Effective October 1, 2019, the Company adopted ASC 842, Leases, using a modified retrospective transition approach which applies the standard to leases existing at the effective date with no restatement of prior periods. The Company’s operating leases have been included in operating lease right-of-use assets, current portion of operating lease liabilities and long-term portion of operating lease liabilities in the consolidated balance sheet. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the leases.

The Company elected to apply the following practical expedients and accounting policy elections permitted by the standard at transition:

The Company has elected that it will not reassess contracts that have expired or existed at the date of adoption for 1) leases under the new definition of a lease, 2) lease classification, 3) whether previously capitalized initial direct costs would qualify for capitalization under the standard.

The Company elected not to separate lease and non-lease components.

The Company elected not to assess whether any land easements are, or contain, leases.

The Company elected to record leases with an initial term of 12 months or less directly in the consolidated statement of operations.

Right-of-use lease assets and lease liabilities that are reported in the Company’s consolidated balance sheets are as follows:


	As of
	September 30, 2020
Operating right-of-use assets, net	$	4,001

Current portion of operating lease liabilities		866
Long-term operating lease liabilities		3,344
Total operating lease liabilities	$	4,210

Finance right-of-use assets, net	$	4,778

Current portion of finance lease liabilities		4,728
Long-term finance lease liabilities		44
Total finance lease liabilities	$	4,772

During the twelve months ended September 30, 2020, the Company had operating lease amortizations of $906, and finance lease amortization of $145. Finance lease interest recorded in the twelve months ended September 30, 2020 was $283.

One of the operating leases contains a variable lease component based on revenue for one component of the Company. The total variable payments for this lease for fiscal year 2020 was $126.

Lease expense for lease payments is recognized on a straight-line basis over the lease term. The components of lease expense related to the Company’s lease for the twelve months ended September 30, 2020 were:


	Twelve months
	ended
	September 30, 2020
Operating lease costs:
Fixed operating lease costs	$	906
Short-term lease costs		41
Variable lease costs		1
Sublease income		(636)
Finance lease costs:
Amortization of right-of-use asset expense		145
Interest on finance lease liability		283
Total lease cost	$	740

The Company serves as lessor to a lessee in one facility through the end of calendar year 2024. The gross rental income and underlying lease expense are presented gross in the Company’s consolidated balance sheet. The Company received rental income of $636 for twelve months ended September 30, 2020.

Supplemental cash flow information related to leases was as follows:


	Twelve months
	Ended
	September 30, 2020
Cash flows included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	948
Operating cash flows from finance leases		283
Finance cash flows from finance leases		145

Non-cash lease activity:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	448

The weighted average remaining lease term and discount rate for the Company’s operating and finance leases as of September 30, 2020 were:


	As of
	September 30, 2020
Weighted-average remaining lease term (in years)
Operating lease	4.81
Finance lease	0.88

Weighted-average discount rate (in percentages)
Operating lease	5.23	%
Finance lease	5.87	%

Lease duration was determined utilizing renewal options that the Company is reasonably certain to execute.

As of September 30, 2020, maturities of operating and finance lease liabilities for each of the following five years and a total thereafter were as follows:


	Operating Leases		Finance Leases

2021	$	896	$	4,929
2022		938		19
2023		979		13
2024		1,349		13
2025		452		5
Thereafter		194		—
Total minimum future lease payments		4,808		4,979
Less interest		(598)		(207)
Total lease liability		4,210		4,772