Leases

6 Months Ended

Jun. 30, 2021

Leases

Leases

Note 6: Leases 

The Company has three operating leases, one for an office space, another for an office space and manufacturing facility, and one for office equipment; and one finance lease for plant equipment. As of June 30, 2021, the leases have remaining terms between more than two years and less than five years. The operating leases do not include an option to extend beyond the life of the current term. There are no short-term leases, and the lease agreements do not require material variable lease payments, residual value guarantees or restrictive covenants.

The tables below present the operating and financing lease assets and liabilities recognized on the condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020:

Right-of Use Assets	June 30, 2021		December 31, 2020
Operating Leases	$	1,301,741	$	1,542,130
Financing Leases		—		1,867
	$	1,301,741	$	1,543,997

Lease Liabilities, Current	June 30, 2021		December 31, 2020
Operating Leases	$	509,537	$	492,804
Financing Leases		—		1,538
	$	509,537	$	494,342
Lease Liabilities, Non-Current
Operating Leases	$	845,012	$	1,105,219
Total Lease Liabilities	$	1,354,549	$	1,599,561

The amortizable lives of operating and financing leased assets are limited by the expected lease term.

The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating and financing 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 leases that commenced prior to that date.

The Company's weighted average remaining lease term and weighted average discount rate for operating and financing leases as of June 30, 2021 and December 31, 2020 are:

June 30, 2021	Operating			Financing
Weighted Average Remaining Lease Term		2.59  Years		—
Weighted Average Discount Rate		4.34	%	—

December 31, 2020	Operating			Financing
Weighted Average Remaining Lease Term		3.85  Years			0.42 Years
Weighted Average Discount Rate		4.29	%		3.95	%

The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable leases with terms of more than one year to the total lease liabilities recognized on the unaudited condensed consolidated balance sheets as of June 30, 2021:

Year Ending December 31,	Operating
Remainder of 2021	$	275,106
2022		562,615
2023		543,577
2024		28,320
2025		23,600
Undiscounted Future Minimum Lease Payments		1,433,218
Less: Difference between undiscounted lease payments and discounted lease liabilities		78,669
Total Lease Liabilities	$	1,354,549
Short-Term Lease Liabilities	$	509,537
Long-Term Lease Liabilities	$	845,012

Operating lease expense for the three months ended June 30, 2021 and 2020 was approximately $136,000 and $128,000, respectively; and for the six months ended June 30, 2021 and 2020 operating lease expense was approximately $271,000 and $257,000, respectively. Operating lease costs are included within selling, general and administrative expenses on the condensed consolidated statements of operations.  

Amortization expense related to our financing leases for the three months ended June 30, 2021 and 2020 was approximately $1,000 and $1,000, respectively; and for the six months ended June 30, 2021 and 2020, amortization expense related to our financing leases was approximately $2,000 and $2,000, respectively. Interest expense related to the financing leases for the three months ended June 30, 2021 and 2020 was approximately $1 and $45, respectively; and for the six months ended June 30, 2021 and 2020, interest lease expense related to financing leases was approximately $10 and $100 , respectively. Financing lease costs are included within selling, general and administrative expenses on the condensed consolidated statements of operations.

Cash paid for amounts included in the measurement of operating lease liabilities were approximately $137,000 and $127,000 for the three months ended June 30, 2021 and 2020, respectively, and approximately $274,000 and $254,000 for the six months ended June 30, 2021 and 2020, respectively. Cash paid for amounts included in the measurement of financing lease liabilities were approximately $400 and $1,000 for the three months ended June 30, 2021 and 2020, respectively, and approximately $1,600 and $2,000 for the six months ended June 30, 2021 and 2020, respectively.