The Company implemented FASB ASU 2016-02, Leases (Topic 842), which required lessees to recognize most leases on its balance sheet effective January 1, 2019. The Company recognized $3.9 million of right of use assets for leases for office, manufacturing and warehouse space and office equipment. The Company also recognized $4.2 million for lease liabilities. The Company has elected not to recognize right of use assets and lease liabilities for short term leases, i.e., leases with a noncancelable period of 12 months or less.

The Company’s leases have remaining lease terms of approximately three to five years, some of which include options to extend the leases for up to an additional five years. For the leases for the office space in Basking Ridge New Jersey and the manufacturing and warehouse space in Rockaway New Jersey, the Company recognized the options to renew the leases as part of the right of use asset and the lease liability as the Company deemed that the renewal options were reasonably certain to be exercised. However, due to the Company’s decision to implement a comprehensive redeployment and cost reduction plan implemented in June 2019, the Company determined the renewal option for the office space at the Basking Ridge location is no longer reasonably certain to be exercised. The Company remeasured the Basking Ridge right of use asset and the lease liability beginning June 1, 2019 utilizing the newly expected lease term.

The incremental borrowing rate used to determine the net present value of the leases at inception was 9.75%. This is the incremental borrowing rate that represents the rate of interest that the Company would expect to pay to borrow an amount equal to the lease payments under similar terms. As the Company does not borrow on a collateralized basis, the non-collateralized borrowing rate is used as an input in deriving the incremental borrowing rate. Following the comprehensive redeployment and cost reduction plan announcement and as required in the lease remeasurement process under Topic 842, the incremental borrowing rate was reassessed and increased to 13.75% at the time of remeasurement. The remeasurement updated the net present value of all operating leases from inception using the new discount rate at June 1, 2019.

For the years ended December 31, 2019 and 2018, the Company recognized lease expense of $787,952 and $496,055, respectively. This expense does not include non-lease components associated with the lease agreements as the Company elected not to include such charges as part of the lease expense.

The tables below provide the details of the right of use assets and lease liabilities:

	December 31, 2019
Operating leases:
Operating lease right of use assets	$	1,430,641
Operating lease liabilities:
Current portion of operating lease liabilities		486,445
Noncurrent operating lease liabilities		1,419,880
Total operating lease liabilities	$	1,906,325
Weighted average remaining lease term (in years)		5.9
Weighted average discount rate		13.75	%

	For the year ended December 31, 2019
Noncash lease expense		315,458
Change in operating lease liabilities		(257,678	)

Future minimum lease payments under non-cancellable operating leases as of December 31, 2019:

Financial year
2020	$	712,076
2021		690,358
2022		337,254
2023		142,892
2024		146,044
2025 and thereafter		676,260
Total future minimum lease payments		2,704,884
Less: Amounts representing interest		(798,559	)
Total	$	1,906,325

Total lease expense, in accordance with the superseded lease standard was $496,055 for 2018. Future minimum lease payments under non-cancellable operating leases as of December 31, 2018 were as follows:

Financial year
2019	$	576,743
2020		714,616
2021		692,893
2022		737,324
2023 and thereafter		3,696,796
Total	$	6,418,372