Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.20.1
Leases
3 Months Ended
Mar. 31, 2020
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 Prepaid and 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):

 

 

 

Three Months

Ended,

 

 

 

March 31, 2020

 

Cash paid for operating lease liabilities

 

$

192

 

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

   lease obligations

 

 

 

Weighted-average remaining lease term

 

 

 

Weighted-average discount rate

 

 

0.0

%

 

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 March 31, 2020 for leases that have commenced were as follows (in thousands):

 

Due in 12 month period ended March 31,

 

 

 

 

2020

 

$

138

 

2021

 

 

7

 

Thereafter

 

 

 

 

 

$

145

 

Less imputed interest

 

 

(5

)

Total lease liabilities

 

$

140

 

 

 

 

 

 

Current operating lease liabilities

 

 

140

 

Non-current lease liabilities

 

 

 

Total lease liabilities

 

$

140

 

 

As of March 31, 2020, right-of-use assets were $0.1 million and lease liabilities were $0.1 million. During the three months ended March 31, 2020, the Company entered into two new real property leases which will commence in July 1, 2020.  The Company expects to recognize a right-of-use asset and an offsetting lease liability in the amount of $1.8 million in the unaudited consolidated balance sheet upon lease commencement.

 

 

Future minimum rental commitments under lease agreements, as of March 31, 2020, with non-cancelable terms greater than one year for each of the years ending December 31 are as follows (in thousands):

 

 

 

Year Ended

 

 

 

December 31,

 

2020 (nine months)

 

$

217

 

2021

 

 

448

 

2022

 

 

481

 

2023

 

 

492

 

2024

 

 

503

 

2025 and thereafter

 

 

462

 

Total future minimum lease obligations

 

$

2,603