Leases

We lease approximately

32,106

square feet in our Bothell, Washington headquarters. The term of our lease continues until

July 31, 2021

with

two

options to extend the term of the lease, each of which is for an additional period of

five

years, with the

first

extension term commencing, if at all, on

August 1, 2021,

and the

second

extension term commencing, if at all, immediately following the expiration of the

first

extension term. In accordance with the amended lease agreement, our monthly base rent is approximately

$63,000

December 31, 2019,

with scheduled annual increases each

August

and again in

October

for the most recent amendment. We are also required to pay an amount equal to the Company’s proportionate share of certain taxes and operating expenses.

We lease approximately

1,250

square feet in our Menlo Park, California location. The term of our lease continues until

July 1, 2020.

In accordance with the lease agreement, the monthly base rent is approximately

$5,000

December 31, 2019.

We are also required to pay an amount equal to the Company’s proportionate electrical expenses.

We lease approximately

9,932

square feet in our Albuquerque, New Mexico location. The term of our lease continues until

December 31, 2021

with

two

options to extend the terms of the lease, each of which is for an additional period of

three

years, with the

first

extension term commencing, if at all, on

December 1, 2021,

and the

second

extension term commencing, if at all,

December 1, 2024.

In accordance with the lease agreement, the monthly base rent is approximately

$9,000

December 31, 2019,

with a monthly increase if the term is extended.

We lease approximately

106,998

square feet in our Detroit, Michigan location. The term of our lease continues until

November 30, 2020

with

one

option to extend the term of the lease, for an additional

sixty

months, with the extension term commencing, if at all, on

November 12, 2020.

These extension options are

not

accounted for under ASC Topic

842,

“Leases” because we are

not

reasonably certain we will enter into the renewal options in their current terms and the current term is less than

months. With adequate notice prior to expiration of the option notice period, we have the right to purchase the premises for a purchase price that is mutually acceptable to landlord and tenant as agreed to by the parties on or before the expiration of the option notice period. In the event that the parties are unable to mutually agree on the option purchase price then each party shall obtain, at its sole cost and expense, an appraisal of the premises and the option purchase price will be the average of the

two

appraisals. For the avoidance of doubt, tenant’s right to elect to purchase the premises for the option purchase price shall terminate upon the expiration of the option notice period, but tenant shall

not

be obligated to close on the purchase of the premises prior to the expiration of the initial term. In accordance with the lease agreement, the monthly base rent is approximately

$15,000

December 31, 2019,

with scheduled annual increases if the term is extended.

Operating leases recorded on our consolidated balance sheet are primarily related to our Bothell, Washington headquarters space lease and our Albuquerque, New Mexico, SAVSU, space lease. We have

not

included extension options in our ROU assets or lease liabilities as we are

not

reasonably certain we will enter into the renewal options in their current terms. Our Detroit, Michigan and Menlo Park, California lease are

not

recorded on our consolidated balance sheet as the term expires in

one

year or less.

Our financing lease is related to research equipment.

We used a weighted average discount rate of

6.5%,

our market collateralized borrowing rate, and

8.1%,

the weighted average implied interest on our leases, to determine our operating and financing lease liabilities, respectively. The weighted average remaining term of our operating and financing leases are

1.8

years and

1.2

years, respectively. We initially recognized

$1.3

million in operating lease right of use assets and initially recognized

$1.8

million in operating lease liabilities. Through the SAVSU acquisition we acquired

$232,000

in operating lease right of use assets and acquired

$232,000

in operating lease liabilities. The operating lease costs recognized in the year ended

December 31, 2019

were

$663,000,

which consist of

$612,000

in operating lease costs and

$51,000

in short-term lease costs, we did

not

have any variable lease costs. The operating lease cash paid in the year ended

December 31, 2019

$778,000.

Rent expense for the year ended

December 31, 2018,

was recognized under prior GAAP (ASC

840

) and amounted to

$809,000.

Maturities of our operating lease liabilities as of

December 31, 2019

is as follows:

(In thousands)	Operating Leases			Financing Leases
2020	$	873		$	15
2021		559			3
Total lease payments		1,432			18
Less: interest		(78	)		(1	)
Total present value of lease liabilities	$	1,354		$	17

The following table provides the future minimum lease payments under noncancelable operating leases with lease terms in excess of

one

year at

December 31, 2018

in accordance with ASC

840:

(In thousands)	Operating Leases
2019	$	748
2020		764
2021		452
Total		1,964