The Company leases office and warehouse space primarily in three locations; Del Mar, CA, Burlingame, CA, and Edwardsville, IL. As each contract does not meet any of the four criteria of ASC 842 for financing lease classification, the Company has determined that each lease arrangement should be classified as an operating lease. The right-of-use assets and lease liabilities for each location are as follows (in thousands):

	March 31,
Right-of-use assets:	2019
Del Mar, CA	$	90
Burlingame, CA		602
Edwardsville, IL		411
	$	1,103

	March 31,
Lease liabilities:	2019
Del Mar, CA	$	99
Burlingame, CA		651
Edwardsville, IL		412
	$	1,162

The Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used its incremental borrowing rate as of January 1, 2019 for operating leases that commenced prior to that date. As of January 1, 2019, the Company’s incremental borrowing rate was 5.25%.

Lease expense for these leases is recognized on a straight-line basis over the lease term. For both quarters ended March 31, 2019 and 2018, lease expense was approximately $0.1 million. Undiscounted future minimum lease commitments as of March 31, 2019 that have initial or remaining lease terms in excess of one year are as follows (in thousands):

2019	$	421
2020		449
2021		223
2022		110
2023		46
Total undiscounted future minimum lease payments		1,249
Less imputed interest		87
Present value of lease liabilities	$	1,162