NOTE 11—LEASES

Operating leases — During the years ended December 31, 2019 and 2018, the Company leased its office space under operating leases with unrelated entities.

The Company leased 21,293 square feet of office space for its headquarters in Torrance, California, at a base rental of $78,908 per month, which the lease will expire on September 30, 2026, and leased an additional 1,600 square feet office space in Torrance, California, at a base rent of $2,240 per month and 2,986 square feet office space in New York, New York, at a base rent of $5,500, which leases expired on January 31, 2020 and December 30, 2019, respectively. Upon expiration of New York office lease in December 2019, the Company leased 1,850 square feet of new office space in New York, New York, at base rent of $8,479 per month, which the lease will expire on January 31, 2023.

The Company leased 1,322 square feet of office space in Tokyo, Japan, which the lease expired on September 30, 2020.

The rent expense for the years ended December 31, 2019 and 2018 amounted to approximately $926,000 and $669,000, respectively.

Future minimum lease payments were as follows as of December 31, 2019 (in thousands):

The Company adopted ASU 2016-02 on January 1, 2019 using a modified retrospective approach and elected the transition method and the practical expedients permitted under the transition guidance, which allowed to carryforward the historical lease classification and our assessment on whether a contract is or contains a lease. The Company also elected to combine lease and non-lease components, such as common area maintenance charges, as single lease, and elected to use the short-term lease exception permitted by the standard as noted in Note 2.

As a result of the adoption of Topic 842 on January 1, 2019, the Company recorded a $3.0 million in operating right-of-use asset and $3.3 million in lease liability and derecognized $287,000 of deferred rent as of the adoption date. These were calculated using the present value of the Company’s remaining lease payments using an estimated incremental borrowing rate. The Company also recorded a $29,000 cumulative effect increase on our accumulated deficit as of January 1, 2019. As of December 31, 2019, the Company had an operating lease right-of-use asset of $4.5 million and lease liability of $4.9 million in the balance sheet. The weighted average remaining term of the Company’s leases as of December 31, 2019 was 6.1 years and the weighted-average discount rate was 11.8%.

Prior to the adoption, future minimum lease payments under non-cancellable leases at December 31, 2018 were as follows (in thousands):