We lease facilities for office and manufacturing space under various operating leases and a security system under a financing lease. Our leases have remaining lease terms of approximately 1 year to 6 years, which represent the non-cancellable periods of the leases and include extension options that we determined are reasonably certain to be exercised. We exclude extension options that are not reasonably certain to be exercised from our lease terms. Our lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms. We often receive customary incentives from our landlords, such as reimbursements for tenant improvements and rent abatement periods, which effectively reduce the total lease payments owed for these leases.

Operating lease right-of-use assets and liabilities on our condensed consolidated balance sheets represent the present value of our remaining lease payments over the remaining lease terms. We do not allocate lease payments to non-lease components. We use our incremental borrowing rate to calculate the present value of our lease payments, as the implicit rates in our leases are not readily determinable.

As of June 30, 2019, the maturities of our operating lease liabilities were as follows (in thousands):

	Remaining Lease Payments June 30, 2019
	Operating			Financing			Total
2019	$	1,567		$	17		$	1,584
2020		3,330			34			3,364
2021		3,413			35			3,448
2022		3,497			9			3,506
2023		3,378			-			3,378
Thereafter		1,744			-			1,744
Total lease payments	$	16,929		$	95		$	17,024
Less: Effects of discounting		(3,871	)		(29	)		(3,900	)
Present value of lease liabilities	$	13,058		$	66		$	13,124
Less: current portion		(2,022	)		(19	)		(2,041	)
Long-term lease liabilities	$	11,036		$	47		$	11,083
Weighted-average remaining lease term	5 years			2.8 years
Weighted-average incremental borrowing rate		11	%		23	%

As of June 30, 2019, we have additional operating leases, primarily for our manufacturing facility, that have not yet commenced of $0.7 million. These operating leases will commence in the third quarter of 2019 with a lease term of 6.25 years.

The component of our lease costs included in our condensed consolidated statements of income were as follows (in thousands):

	Quarter Ended		Six Months Ended
Lease Cost	June 30, 2019
Operating lease cost	$	914	$	1,879
Finance lease cost
Amortization of leased assets		8		16
Interest on lease liabilities		4		8
Net lease cost	$	926	$	1,903

Total future aggregate minimum lease payments calculated under ASC 840 at December 31, 2018 were as follows (in thousands):

	Remaining Lease Payments December 31, 2018
	Operating			Financing			Total
2019	$	3,133		$	33		$	3,166
2020		3,330			34			3,364
2021		3,413			35			3,448
2022		3,497			9			3,506
2023		3,378			-			3,378
Thereafter		1,744			-			1,744
Total lease payments	$	18,495		$	111		$	18,606
Less: amount representing interest		-			(33	)		(33	)
Value of lease liabilities under ASC 840	$	18,495		$	78		$	18,573
Less: current portion		(3,133	)		(17	)		(3,150	)
Long-term lease liabilities	$	15,362		$	61		$	15,423

We purchase food-grade peanut flour from Golden Peanut Company, or GPC, pursuant to a long-term exclusive commercial supply agreement, which was expanded and extended in January 2018. GPC is precluded from selling several peanut flour products to any third party worldwide for use in oral immunotherapy, or OIT, for the treatment or cure of peanut allergy, provided that we are in compliance with our exclusive purchase obligation and meet specified annual purchase commitments. The restated agreement remains in effect until ten years after the first delivery to us of peanut flour for commercial use and includes an option for us to extend the term for an additional five years.

In connection with the expansion and extension of the agreement, we issued Archer Daniels Midland Company 300,000 shares of restricted common stock, vesting in four tranches over a 3.5 year period. Expense related to these shares will be measured as each tranche vests and recognized over the vesting period. At issuance, these shares had a fair value of $11.7 million, which will be remeasured as each tranche vests and recognized as general and administrative expense over the vesting period. Subject to certain exceptions, in the event that the price per share of our common stock were to fall below a specified level, the restated agreement provides that GPC would only be prohibited from selling one peanut flour product to any third party in the United States, Mexico, Canada, the European Union or Japan for use in OIT for the treatment or cure of peanut allergy.

Pursuant with the restated agreement, our purchase obligation commences with the first delivery of peanut flour for commercial use, which we currently anticipate will occur in 2019, and the aggregate purchase commitment under this agreement would be $3.3 million over a term of ten years.

In December 2018, we entered into an exclusive supply agreement for egg protein with Michael Foods, Inc. Pursuant to the agreement, we have exclusive access to the clinical and commercial use of Michael Foods’ egg products for any egg allergy treatment, prevention or cure for a period of up to 15 years beyond the potential approval of AR201.

In May 2019, we entered into a Commercial Supply Agreement, or the Commercial Supply Agreement, pursuant to which CoreRx, Inc. agreed to manufacture commercial supply of AR101, if approved. Under the Commercial Supply Agreement, we are required to purchase a minimum percentage of our AR101 commercial supply requirements in each of the first six years of the Commercial Supply Agreement, subject to certain conditions and restrictions, ranging from 100% in 2019 and decreasing to a majority in 2024. We are also required to purchase a minimum percentage of our AR101 supply requirements for release testing in each of the first six years of the Commercial Supply Agreement, ranging from 100% in 2019 and decreasing to a significant majority in 2024. As of June 30, 2019, the minimum aggregate purchase commitment under this agreement would be $4.3 million. The initial term of the Commercial Supply Agreement began upon execution of the Commercial Supply Agreement and will continue until December 31, 2024. The Commercial Supply Agreement then automatically renews for successive two-year terms, unless earlier terminated pursuant to its terms, or upon either party’s notice of termination to the other.

We indemnify each of our officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at our request in such capacity, as permitted under Delaware law and in accordance with its certificate of incorporation and bylaws. The term of the indemnification period lasts as long as an officer or a director may be subject to any proceeding arising out of acts or omissions of such officer or director in such capacity. The maximum amount of potential future indemnification is unlimited; however, we currently hold director and officer liability insurance. This insurance allows the transfer of risk associated with our exposure and may enable us to recover a portion of any future amounts paid. We believe that the fair value of these indemnification obligations is minimal. Accordingly, we have not recognized any liabilities relating to these obligations for any period.

We are currently not a party to any material legal proceedings. During the normal course of business, we may be a party to legal claims that may not be covered by insurance. We do not believe that any such claims would have a material impact on our consolidated financial statements.