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Leases

9 Months Ended

Sep. 30, 2020

NOTE 3 - LEASES

On January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”) using the modified retrospective approach for all lease arrangements at the beginning period of adoption. Leases existing for the reporting period beginning January 1, 2019 are presented under ASU 2016-02. The Company leases office space and vehicles under operating leases.

We determine if an arrangement is a lease at inception. Operating lease assets are presented as operating lease right-of-use (“ROU”) assets, and corresponding operating lease liabilities are presented within accrued expenses and other current liabilities (current portions), and as operating lease liabilities (long-term portions), on our consolidated balance sheet.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the remaining lease payments over the lease term at commencement date. Our leases do not provide an implicit interest rate. We calculate the incremental borrowing rate to reflect the interest rate that we would have to pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment over a similar term, and consider our historical borrowing activities and market data in this determination. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

We have lease agreements with lease and non-lease components, which we account for as a single lease component. Some of our leases contain variable lease payments, which are expensed as incurred unless those payments are based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the lease liability; thereafter, changes to lease payments due to rate or index updates are recorded as rent expense in the period incurred. We have elected not to recognize ROU assets and lease liabilities for short-term leases that have a term of 12 months or less. The effect of short-term leases on our ROU assets and lease liabilities was not material. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. In addition, we do not have any related party leases and our sublease transactions are de minimis.

As of September 30, 2020 and December 31, 2019, the Company’s ROU assets and lease liabilities for operating leases totaled $822 and $962, respectively.

Supplemental cash flow information related to operating leases was as follows:

	For the Nine Months Ended September 30, 2020		For the Year Ended December 31, 2019

Cash payments for operating leases	$	145	$	354

Undiscounted maturities of operating lease payments as September 30, 2020 and December 31, 2019 are summarized as follows:

	As of September 30, 2020			Year ended December 31, 2019
	Operating Leases			Operating Leases

2020 (Remainder of the year)	$	66		$	216
2021		235			234
2022		180			180
2023		175			174
2024		176			176
2025		155			154
Total future lease payments		987			1,134
Less imputed interest		(174	)		(231	)
Total lease liability balance	$	813		$	903

Leases recorded on the balance sheet consist of the following:

	As of September 30, 2020		Year ended December 31, 2019
Assets
Operating lease right of use asset	$	822	$	962

Liabilities
Operating lease - current		184		143
Operating lease - non-current		629		760
	$	813	$	903

	As of September 30, 2020			Year ended December 31, 2019

Operating leases weighted average remaining lease term (in years)		2.5			2.5
Operating leases weighted average discount rate		9	%		9	%