Note 3 – Fixed Assets

Fixed assets are summarized as follows:


	June 30,		December 31,
	2019		2018
	(unaudited)
Machinery and equipment	$	863,000	$	853,000
Office furniture and equipment		193,000		186,000
Leasehold improvements		150,000		150,000
Right of use asset-operating leases		710,000		637,000
Accumulated depreciation and amortization		(1,532,000)		(1,369,000)
	$	384,000	$	457,000

The Company has a triple net operating lease for office and laboratory space in Seattle, Washington through March 2020 with rent of approximately $12,000 per month plus triple net operating costs. The Company also has a triple net operating lease for office space in Tulsa, Oklahoma through August 2019 with monthly rent of approximately $2,000 per month plus triple net operating costs. Both leases include lessee renewal options for three years at the then prevailing market rate. The Company exercised the option to renew the Tulsa lease for three additional years in August 2019. The rent for the Tulsa lease will be approximately $2,200 a month beginning September 2019 through August 2022 with an annual 2.5% increase. The Company has an operating lease for office space in Beijing, China through November 2020 with a monthly rent of approximately $6,000.

Lease costs for the six months ended June 30, 2019 and 2018 and other quantitative disclosures are as follows (unaudited):


	For the three months ended June 30,					For the six months ended June 30,
	2019		2018			2019		2018
Lease cost:
Operating lease cost	$	58,000	$	53,000		$	117,000	$	106,000
Total lease cost	$	58,000	$	53,000		$	117,000	$	106,000

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	119,000

Right-of-use assets obtained in exchange for new operating lease liabilities			$	73,000
For operating lease:
Weighted average remaining lease term (in years)				1.59
Weighted average discount rate				5.71	%

At June 30, 2019, the Company recorded a right-of-use asset and operating lease liability amounting to $73,000 upon extension of the lease for its office space in Tulsa, Oklahoma through August 2022.

Minimum future payments under the Company’s leases at June 30, 2019 and their application to the corresponding lease liabilities are as follows (unaudited):


	Discounted lease		Payments due under
	liability payments		lease agreements
2019 (remaining 6 months)		112,000		119,000
2020		114,000		121,000
2021		25,000		27,000
2022		18,000		19,000
Total	$	269,000	$	286,000