In February 2016, the FASB issued ASU 2016-02: Leases (Topic 842). This ASU requires a lessee to recognize a right-of-use asset and a lease liability on its balance sheet for most operating leases. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018, including interim periods within those fiscal years. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides companies with an additional optional transition method to apply the new standard to leases in effect at the adoption date through a cumulative effect adjustment. The Company adopted the new lease standard as of January 1, 2021 using the modified retrospective transition method.

The Company elected the package of practical expedients referenced in ASU 2016-02, which permits companies to retain original lease identification and classification without reassessing initial direct costs for existing leases. The Company also elected the practical expedient that exempts leases with an initial lease term of twelve months or less, as well as the practical expedient that allows companies to select, by class of underlying asset, not to separate lease and non-lease components. Adoption of this standard resulted in the recognition of a right-of-use asset and a lease liability on the Company’s January 1, 2021 Consolidated Balance Sheet of $1,560,000 and $1,559,000, respectively. There was no material impact on the Company’s Condensed Consolidated Statement of Operations and Comprehensive Loss.

The Company has operating leases for real estate (primarily office space) and certain equipment with various expiration dates. The Company also has one finance lease for certain equipment. Rent expense was $150,000 and $82,000, for the three months ended September 30, 2022 and 2021, respectively. For the nine months ended September 30, 2022 and 2021, the Company’s rent expense was $379,000 and $303,000, respectively.

The following table summarizes the classification of operating and finance lease assets and obligations in the Company's Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 (in thousands):


	September 30, 2022		December 31, 2021
Operating leases:
Right of use assets	$	2,027	$	1,139

Operating lease liabilities, current	$	392	$	235
Operating lease liabilities, noncurrent		1,660		985
Total operating lease liabilities	$	2,052	$	1,220

Finance leases:
Right of use assets	$	78	$	102

Finance lease liabilities, current	$	34	$	32
Finance lease liabilities, noncurrent		57		82
Total finance lease liabilities	$	91	$	114

Maturities of lease liabilities for the Company’s operating and finance leases are as follows as of September 30, 2022 (in thousands):


	Operating Leases			Finance Leases			Total
2022 (remaining three months)		132			10			142
2023		551			40			591
2024		566			40			606
2025		568			10			578
2026		483			—			483
Thereafter		174			—			174
Total lease payments		2,474			100			2,574
Less: imputed interest		(422	)		(9	)		(431	)
Present value of lease liabilities	$	2,052		$	91		$	2,143

The weighted average remaining lease term for operating leases is 4.4 years, and 2.5 years for the finance lease. The weighted average discount rate is 8.5%.