12. LEASES

The Company records a right-of-use (“ROU”) asset and lease liability for substantially all leases for which it is a lessee, in accordance with ASU 842. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for the leases on a straight-line basis over the lease term. At inception of a contract, the Company considers all relevant facts and circumstances to assess whether or not the contract represents a lease by determining whether or not the contract conveys the right to control the use of an identified asset, either explicit or implicit, for a period of time in exchange for consideration.

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.

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


	Three months		Three months
	ended		ended
	December 31, 2020		December 31, 2019
Operating right-of-use assets, net	$	4,093	$	4,739

Current portion of operating lease liabilities		949		864
Long-term operating lease liabilities		3,358		4,044
Total operating lease liabilities	$	4,307	$	4,908

Finance right-of-use assets, net		4,742		4,641

Current portion of finance lease liabilities		4,693		4,616
Long-term finance lease liabilities		40		17
Total finance lease liabilities	$	4,733	$	4,633

During the three months ended December 31, 2020, the Company had operating lease of $232 and finance lease amortizations of $37. Finance lease interest recorded in the quarter was $69.

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 the three months ended December 31, 2020 was $76.

Lease costs included in the condensed consolidated statements of operations consist of the following:


	Three months ended		Three months ended
	December 31, 2020		December 31, 2019
Operating lease costs:
Fixed operating lease costs	$	229	$	214
Short-term lease costs		10		14
Variable lease costs		2		1
Lease income		(160)		(159)
Finance lease costs:
Amortization of right-of-use asset expense		37		32
Interest on finance lease liability		69		67
Total lease cost	$	187	$	169

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 condensed consolidated balance sheet. The Company received rental income of $160 and $159 during the three months ended December 31, 2020 and December 31, 2019, respectively.

Supplemental cash flow information related to leases was as follows:


	Three months ended		Three months ended
	December 31, 2020		December 31, 2019
Cash flows included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	229	$	58
Operating cash flows from finance leases		69		32
Finance cash flows from finance leases		108		104

Non-cash lease activity:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	448	$	377

The weighted average remaining lease term and discount rate for the Company’s operating and finance leases as of December 31, 2020 were:


	Three months		Three months
	Ended		Ended
	December 31, 2020		December 31, 2019
Weighted-average remaining lease term (in years)
Operating lease	4.51		5.41
Finance lease	0.88		0.58

Weighted-average discount rate (in percentages)
Operating lease	5.22	%	5.22	%
Finance lease	5.84	%	5.95	%

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

As of December 31, 2020, maturities of operating and finance lease liabilities for each of the following five fiscal years and a total thereafter were as follows:


	Operating Leases		Finance Leases
2021 (remainder of fiscal year)	$	731	$	4,821
2022		1,029		19
2023		1,063		13
2024		1,062		13
2025		609		5
Thereafter		377		—
Total minimum future lease payments		4,871		4,871
Less interest		(564)		(138)
Total lease liability		4,307		4,733