13. Leases

As described in Note 2, effective January 1, 2019, the Company adopted ASC 842 using the optional transition method, applying no practical expedients. In accordance with the optional transition method, the Company did not recast the prior period consolidated financial statements. The lease term is the noncancelable period of the lease. There are no termination provisions or renewal periods reasonably certain of exercise or options controlled by the lessor.

The Company conducts its operations from leased facilities in Morrisville, North Carolina, and San Antonio, Texas, the leases for which will expire in 2027 and 2023. The leases are for general office space and require the Company to pay property taxes, insurance, common area expenses and maintenance costs.

On October 1, 2019, commencement date of our Morrisville, North Carolina lease, a right-of-use asset of $2.0 million and a liability of $1.4 million were recorded on our balance sheet. Total cash paid for operating leases during the year ended December 31, 2019 was $0.7 million and is included within cash flows from operating activities within the consolidated statement of cash flows.

The Company leases furniture and specialized lab equipment under finance leases. The related right-of-use assets are amortized on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset. The effective interest rate is 6.2%.

The Company’s lease cost reflected in the accompanying Statements of Operations and Comprehensive loss as follows:


	For the Year Ended December 31, 2019
Operating lease cost	$	191,737
Finance lease cost
Amortization of lease assets		5,210
Interest on lease liabilities		954
Lease cost	$	6,164

The weighted average remaining lease term and incremental borrowing rate as of December 31, 2019 were as follows:


Weighted average remaining lease term (years)
Operating leases	7 years
Finance leases	3 years
Weighted average discount rate
Operating leases	6.58	%
Finance leases	6.17	%

Maturities of operating and finance lease liabilities as of December 31, 2019 were as follows:


For the year ending December 31:	Operating Leases		Finance Leases	Total
2020	$	321,273	58,980	380,253
2021		330,032	58,980	389,012
2022		338,960	93,990	432,950
2023		244,973	-	244,973
2024		231,503	-	231,503
Thereafter		693,272	-	693,272
Total minimum lease payments		2,160,013	211,950	2,371,963
Less: Interest		(423,607)	(20,179)	(443,786)
Present value of lease liabilities	$	1,736,406	191,771	1,928,177

Maturities of operating lease liabilities as of December 31, 2018 were as follows:


For the year ending December 31:
2019		309,729
2020		115,580
2021		118,158
2022		120,736
2023		20,194
Total	$	684,397