Note 10 – Leases

The Company leases office and manufacturing facilities in Hopewell Junction, NY under a non-cancelable operating lease agreement. The lease for these facilities, as amended, expires in May 2024 and does not contain a renewal option. The lease agreement does not contain any residual value guarantees, or material restrictive covenants.

The Company also leases an office facility for its design group in Santa Clara, California. During the fourth quarter of 2019, the Company signed a two-year extension of this lease that expires in October 2021. The lease agreement does not contain any residual value guarantees, material restrictive covenants or a renewal option.

The Company's operating 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 incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date.

On May 2, 2019, the Company entered into a three-year finance lease commitment for phone equipment. Finance leases are included in equipment, furniture and leasehold improvements, net, Other current liabilities, and Finance lease liability – long term in our consolidated Balance Sheet.

Rent expense was approximately $1.0 million for each of the years ended December 31, 2019 and 2018.

The components of lease expense were as follows (in thousands):


	Twelve Months Ended
	December 31, 2019
Finance Lease Cost:
Amortization of right-of-use assets	$	11
Interest on lease liabilities		3
Operating lease cost		986
Short-term lease cost		58
Total Lease Cost	$	1,058


Other Information
Cash paid for amounts included in the measurement lease liabilities:
Operating cash flows from operating leases	$	1,012
Financing cash flows from finance leases	$	13
Right-of-use assets obtained in exchange for new finance lease liabilities	$	50
Right-of-use assets obtained in exchange for new operating lease liabilities	$	110


	December 31, 2019
Finance lease right-of-use assets	$	40
Operating lease right-of-use assets	$	3,729
Finance lease liability, current	$	16
Finance lease liability, non-current	$	24
Operating lease liabilities, current	$	775
Operating lease liabilities, non-current	$	3,067
Weighted average remaining lease terms - finance leases		2.33 years
Weighted average remaining lease terms - operating leases		4.42 years
Weighted average discount rate - finance leases		10.91%
Weighted average discount rate - operating leases		8.48%

Future annual minimum lease payments and finance lease commitments as of December 31, 2019 were as follows (in thousands):


	Operating Leases		Finance Leases
2020	$	1,063	$	20
2021		1,054		20
2022		1,014		6
2023		1,022		-
2024		426		-
Thereafter		-		-
Total undiscounted future minimum lease payments		4,579		46
Less imputed interest		737		6
Lease liability	$	3,842	$	40