Operating Leases

The Company has

six

operating leases for office and laboratory space used to conduct business (

one

of which is for a data center). The exercise of lease renewal options is at our discretion and the majority of renewals to extend the lease terms are

not

included in our Right-Of-Use (“ROU”) assets and lease liabilities as they are

not

reasonably certain of exercise. The Company regularly evaluates the renewal options and when they are reasonably certain of exercise. The Company includes the renewal period in the lease term. As most of the Company’s leases do

not

provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

As of

June 30, 2019,

the Company recognized a Right-Of-Use (“ROU”) asset with a corresponding operating lease liability of

$1.4

million based on the present value of the minimum rental payments as a result of adoption of ASC Topic

842.

The weighted average discount rate used for leases as of

June 30, 2019

4.1%.

The weighted average lease term as of

June 30, 2019

2.0

years. The operating lease expense for the

three

and

six

months ended

June 30, 2019

was

$0.3

million and

$0.5

million, respectively.

Maturities and balance sheet presentation of the Company’s lease liabilities for all operating leases as of

June 30, 2019

is as follows (in thousands):

2019	$	548
2020		648
2021		156
2022		116
2023		18
Total Lease Payments		1,486
Less Interest:		(70	)
Present value of lease liabilities	$	1,416

Current operating lease liabilities	$	861
Long-term operating lease liabilities		555
Total	$	1,416