Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

v3.19.3
Commitments and Contingencies
9 Months Ended
Sep. 30, 2019
Commitments and Contingencies  
Commitments and Contingencies

10. Commitments and Contingencies

Leases

All of the Company’s existing leases as of September 30, 2019 are classified as operating leases. As of September 30, 2019, the Company has one material operating lease for facilities with a remaining term expiring in 2022. The existing lease has fair value renewal options, none of  which are considered certain of being exercised or included in the minimum lease term. The discount rate used in the calculation of the lease liability was 9.9%. The rates implicit within the Company’s leases are generally not determinable, therefore, the Company’s incremental borrowing rate is used to determine the present value of lease payments. The determination of the Company’s incremental borrowing rate requires judgment. Because the Company currently has no outstanding debt, the incremental borrowing rate for each lease is primarily based on publicly-available information for companies within the same industry and with similar credit profiles. The rate is then adjusted for the impact of collateralization, the lease term and other specific terms included in the Company’s lease arrangements. The incremental borrowing rate is determined at lease commencement, or as of January 1, 2019 for operating leases in existence upon adoption of ASC 842. The incremental borrowing rate is subsequently reassessed upon a modification to the lease arrangement. ROU assets are subsequently assessed for impairment in accordance with the Company’s accounting policy for long-lived assets. Operating lease costs are presented as part of the general and administrative expenses in the condensed consolidated statements of operations, and for the three and nine months ended September 30, 2019 approximated $50,000 and $151,000, respectively. During the same period, operating cash flows used for operating leases approximated $75,000 and $224,000, respectively. During 2019, there were no ROU assets exchanged for operating lease obligations. The initial non-cash addition of ROU assets due to adoption of ASC 842 was $538,000.

A maturity analysis of our operating leases as of September 30, 2019 is as follows (amounts in thousands of dollars):

 

 

 

 

 

Future undiscounted cash flows:

    

 

  

2019

 

$

77

2020

 

 

309

2021

 

 

321

2022

 

 

192

Total

 

$

899

 

 

 

 

Discount factor

 

$

(119)

Lease liability

 

$

780

Amount due within 12 months

 

$

(241)

Non-current lease liability

 

$

539

 

As of December 31, 2018, the Company’s future minimum lease payments were as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

2019

    

2020

    

2021

    

2022

    

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Lease

 

$

300

 

$

309

 

$

321

 

$

192

 

$

1,122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

300

 

$

309

 

$

321

 

$

192

 

$

1,122