Effective January 1, 2019, the Company accounts for its leases under ASC 842, Leases (Topic 842). Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease, if available, otherwise at the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. Variable lease expenses, if any, are recorded when incurred.

In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. The Company does not act as a lessor.

The Company leased office space in West Chester, Pennsylvania under an agreement classified as an operating lease that expired in May 2021. On July 1, 2019, the Company entered into a lease for office space located in West Chester which was further amended on March 12, 2020 to include additional office space. The initial term will expire on September 1, 2027. Base rent over the initial term is approximately $2.4 million, and the Company is also responsible for its share of the landlord’s operating expense.

The Company leases office space in Cranford, New Jersey under an agreement classified as an operating lease, which commenced on May 1, 2022 and expires on April 30, 2025. Base rent over the initial term is approximately $104,000. During the period ending June 30, 2022, the Company recognized a right-of-use asset of $99,000 and a lease liability of $95,000.

The Company leases a vehicle under a financing lease that expires in 2025. The net basis of the vehicle lease of $19 thousand is recorded as property and equipment on the condensed balance sheet.

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


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
Finance lease cost:
Amortization lease assets	$	2	$	1	$	3	$	1
Finance lease costs		—		1		—		1
Total finance lease costs	$	2	$	2	$	3	$	2
Operating lease:
Operating lease costs	$	90	$	84	$	175	$	175
Short-term lease costs		—		5		8		10
Total operating lease expense	$	90	$	89	$	183	$	185

Maturities of the Company’s operating and finance leases, excluding short-term leases, as of June 30, 2022 are as follows (in thousands):


	June 30, 2022
	Operating			Finance
2022 (remaining 6 months)		187			4
2023		383			7
2024		392			8
2025		372			2
Thereafter		613			—
Total lease payments		1,947			21
Less imputed interest		(285	)		(1	)
Lease liability	$	1,662		$	20