The Company adopted ASU No. 2016-02, Leases (Topic 842) on January 1, 2019 and recognized leases with duration greater than 12 months on the balance sheet using the modified retrospective approach. Prior year financial statements have not been restated and therefore those amounts are not presented below. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed for a carry-forward of the historical lease classification. For leases with terms greater than 12 months, the Company has recorded the related Right-Of-Use asset and liability at the present value of lease payments over the term. Renewal options have been factored into the determination of lease payments when appropriate. There are no residual value guarantees on the existing leases. The Company estimates its incremental borrowing rate, at lease commencement, to determine the present value of lease payments, since most of the Company’s leases do not provide an implicit rate of return.

The Company’s lease population consists primarily of office equipment. The Company does not have any finance leases. The Company determines at contract inception, if an arrangement is a lease or contains a lease based on whether the Company obtains the right to control the use of specifically identifiable property, plant and equipment for a period of time in exchange for consideration. The Company has elected not to separate non-lease components from lease components for its leases. Variable lease payments are recognized as expense when incurred.

As of June 30, 2019, the Company had no operating leases that had not yet commenced.

The table below presents the assets and liabilities related to operating leases recorded on the balance sheet:


	Classification on the Consolidated
(in thousands)	Balance Sheet		June 30, 2019
Assets:
Operating lease right-of-use assets		Other assets	$	182

Liabilities:
Current maturities of operating leases		Accrued expenses and other liabilities	$	46
Long-term operating lease liabilities		Other long-term liabilities		134
Total lease liabilities			$	180


	Classification on the Consolidated		Three months ended		Six months ended
(in thousands)	Statements of Operations		June 30, 2019		June 30, 2019
Operating lease cost		Selling, general and administrative expenses	$	13		26
Short-term lease cost		Selling, general and administrative expenses		0		1
Total lease cost			$	13		27


Cash paid for amounts included in the measurement of lease liabilities –operating leases (in thousands)	$	23
Weighted average remaining lease term –operating leases		3.8	years
Weighted average discount rate – operating leases		3.68	%


Maturity of lease liabilities
(in thousands)	Operating Leases
2019 (excluding the six months ended June 30, 2019)	$	26
2020		52
2021		52
2022		52
2023		10
Thereafter		-
Total lease payments		192
Less: Amounts representing interest		(12)
Present value of lease liabilities	$	180

In the second quarter of 2019, the Company entered into an operating lease as the lessor for certain real estate leased to a third party under an operating lease with an initial lease term of 36 months. The lease requires fixed monthly payments and does not contain clauses for future rent escalations or renewal options. There are no terms and conditions under which the lessee has the option to purchase this asset. As of June 30, 2019, projected future lease income on this lease totaled $648,000 scheduled to be received as follows: 2019 - $118,000 (excluding the six months ended June 30, 2019), 2020 - $235,500, 2021 - $235,500 and 2022 - $59,000. During the three and six months ended June 30, 2019, the Company recorded rental income of $29 thousand and is classified as part of selling, general and administrative expenses on the consolidated statements of operations.