Note

— Lease Obligations and Other Contingencies

The Company has the following minimum payments under operating lease obligations that existed at

December

31,

2017:

2018	$	1,169
2019		1,154
2020		862
2021		479
2022		490
Thereafter		1,999
Total minimum payments	$	6,153

The obligations in the preceding table are primarily related to the Company’s leases for buildings in Birmingham, Alabama and Durham, North Carolina. The lease for the Company’s headquarters in Durham, North Carolina expires

June

30,

2020.

The lease for the Company’s research facility in Birmingham, Alabama expires

October 31, 2026.

Rent expense for operating leases was

$617,

$721

and

$664

2017,

2016,

and

2015,

respectively.

Lease Financing Obligation

Based on the terms of the lease agreement for the new research facility in Birmingham, Alabama, the Company had construction period risks during the construction period and the Company was deemed the owner of the building (for accounting purposes only) during the construction period, which ended in

2016.

Accordingly, the Company recorded an asset of

$1,589

December 31, 2015,

representing the Company’s leased portion of the building and recorded a corresponding liability. Upon completion of leasehold improvement construction, the Company did

not

meet the sale-leaseback criteria for de-recognition of the building asset and liability. Therefore, the lease is accounted for as a financing obligation. The asset will be depreciated over the expected duration of the lease, and rental payments will be treated as principal and interest payments on the lease financing obligation liability. The underlying accounting for this transaction has

impact on cash flows associated with the underlying lease and or construction in process.

At each of

December 31, 2017

and

2016,

the lease financing obligation balance was

$2,704

and was recorded as a long-term liability on the consolidated balance sheets. The remaining future minimum payments under the lease financing obligation are

$4,334.