Note 9 – Leases

The Company leases administrative and manufacturing facilities through operating lease agreements. The Company has no finance leases as of June 30, 2019. Our leases include both lease (e.g., fixed payments including rent) and non-lease components (e.g., common area or other maintenance costs). The facility leases include one or more options to renew. The exercise of lease renewal options is typically at our sole discretion, therefore, the renewals to extend the lease terms are not included in our ROU assets or lease liabilities as they are not reasonably certain of exercise. We regularly evaluate the renewal options and, when they are reasonably certain of exercise, we include the renewal period in our lease term.

Operating leases result in the recognition of ROU assets and lease liabilities on the Condensed Consolidated Balance Sheets. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate at the commencement date to determine the present value of lease payments. Most real estate leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more. Lease expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Balance Sheets. The primary leases we enter into with initial terms of 12 months or less are for equipment.

Supplemental information regarding leases:

	June 30 2019
In thousands, unless otherwise noted	June 30 2019
Balance Sheet:
ROU assets	$	1,281
Current lease liabilities		322
Non-current lease liabilities	$	994
Total lease liabilities		1,316
Weighted average remaining lease term (years)		3.0
Weighted average discount rate		8.9%
Future minimum lease payments:
2019	$	245
2020		349
2021		342
2022		348
2023		295
Thereafter		-
Total		1,579
Less: Imputed interest		263
Total lease liabilities		1,316
Less: Current lease liabilities		322
Long-term lease liabilities	$	994

Supplemental cash flow information regarding leases:

	For the three months ended June 30, 2019		For the six months ended June 30, 2019

In thousands
Operating cash flow information:
Cash paid for amounts included in the measurement of lease liabilities	$	121	$	243
Non-cash activity:
ROU assets obtained in exchange for lease liabilities		-		162

Total operating lease expense and short-term lease expense was $249,000 and $64,000, respectively, for the six months ended June 30, 2019. Total operating lease expense and short-term lease expense was $124,000 and $32,000, respectively, for the three months ended June 30, 2019.