Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.19.3
Leases
9 Months Ended
Sep. 30, 2019
Leases [Abstract]  
Leases

NOTE 10— LEASES

The Company enters into operating leases primarily for real estate, office equipment, and fleet vehicles. Lease terms generally range from one to five years, and often include options to renew for one year. On January 1, 2019, the Company adopted Topic 842, using the modified-retrospective approach as discussed in Note 2, and as a result recognized a right-of-use asset of approximately $0.8 million as adjusted for deferred rent at the date of adoption of $0.2 million, and a lease liability of approximately $1.0 million. No cumulative-effect adjustment to retained earnings was required upon adoption of Topic 842. Right-of-use assets are recorded in Other assets and lease liabilities are included in Accrued liabilities or Other liabilities depending on whether they are current or noncurrent. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate (“IBR”) to determine the present value of the lease payments and on the date of adoption, the Company determined its IBR to be 12.78%. This rate was based on the Company’s financing of the SWK Loan which is a collateralized loan, and was based on prevailing market rates during the fourth quarter of 2018.

Information related to the Company’s right-of-use assets and related liabilities were as follows (in thousands):

 

 

 

Nine Months Ended

 

 

 

September 30, 2019

 

Cash paid for operating lease liabilities

 

$

606

 

Right-of-use assets obtained in exchange for new operating lease

   obligations

 

 

803

 

Weighted-average remaining lease term

 

1.4 years

 

Weighted-average discount rate

 

 

12.8

%

 

 

The Company allocates lease cost amongst lease and non-lease components. The Company excludes short-term leases (those with lease terms of less than one year at inception) from the measurement of lease liabilities or right-of-use assets.

Maturities of lease liabilities as of September 30, 2019 were as follows (in thousands):

 

Due in 12 month period ended September 30,

 

 

 

 

2020

 

$

484

 

2021

 

 

45

 

Thereafter

 

 

 

 

 

$

529

 

Less imputed interest

 

 

(38

)

Total lease liabilities

 

$

491

 

 

 

 

 

 

Current operating lease liabilities

 

 

476

 

Non-current lease liabilities

 

 

15

 

Total lease liabilities

 

$

491

 

 

As of September 30, 2019, right-of-use assets were $0.4 million and lease liabilities were $0.6 million. During the three and nine months ended September 30, 2019, the Company did not enter into any new lease arrangements, nor did it have any arrangements that had not commenced.

 

 

Future minimum rental commitments under lease agreements, as of September 30, 2019, with non-cancelable terms greater than one year for each of the periods ending September 30, are as follows (in thousands):

 

 

 

Period Ended

September 30, 2019

 

2019 (three months)

 

$

192

 

2020

 

 

314

 

2021

 

 

23

 

2022 and thereafter

 

 

 

Total future minimum lease obligations

 

$

529