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Leases | 6 Months Ended
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Jun. 30, 2020
Leases [Abstract] |
Leases | 8. Leases We have operating leases for our corporate offices and our manufacturing facility, and finance leases for equipment. Our leases have remaining lease terms of three months to 2.25 years, and our two primary operating leases include options to extend the leases for one to three years. Those operating leases also include options to terminate the leases within one year. Future renewal options that are not likely to be executed as of the balance sheet date are excluded from right-of-use assets and related lease liabilities. Our corporate office lease is automatically renewed at a cost increase of 2% on a yearly basis unless we provide written notice three months prior to expiration date. We report operating leased assets, as well as operating lease current and noncurrent obligations on our balance sheets for the right to use those buildings in our business. Our finance leases represent manufacturing equipment. We report the manufacturing equipment, as well as finance lease current and noncurrent obligations on our balance sheets. Generally, interest rates are stated in our leases for equipment. When no interest rate is stated in a lease, however, we review the interest rates implicit in our recent finance leases to estimate our incremental borrowing rate. We determine the rate implicit in a lease by using the most recent finance lease rate, or other method we think most closely represents our incremental borrowing rate. The components of lease expense were as follows (in thousands):
|  | Three Months Ended June 30, 2020 |  |  | Six Months Ended June 30, 2020 |
Operating lease cost (1) |  | $ | 123 |  |  | $ | 242 |
Finance lease cost: |  |  |  |  |  |  |  |
Amortization of leased assets |  | $ | 152 |  |  | $ | 303 |
Interest on lease liabilities |  |  | 5 |  |  |  | 12 |
Total finance lease cost |  | $ | 157 |  |  | $ | 315 |
| (1) | Includes short term lease costs of $27,000 and $51,000 for the three and six months ended June 30, 2020, respectively.
|  | Three Months Ended June 30, 2019 |  |  | Six Months Ended June 30, 2019 |
Operating lease cost (1) |  | $ | 153 |  |  | $ | 309 |
Finance lease cost: |  |  |  |  |  |  |  |
Amortization of leased assets |  | $ | 157 |  |  | $ | 318 |
Interest on lease liabilities |  |  | 8 |  |  |  | 18 |
Total finance lease cost |  | $ | 165 |  |  | $ | 336 |
| (1) | Includes short term lease costs of $32,000 and $66,000 for the three and six months ended June 30, 2019, respectively.
Supplemental cash flow information related to leases was as follows (in thousands):
|  | Three Months Ended June 30, 2020 |  |  | Six Months Ended June 30, 2020 |
Cash paid for amounts included in leases: |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | (92 | ) |  | $ | (183 | )
Operating cash flows from finance leases |  |  | (5 | ) |  |  | (12 | )
Financing cash flows from finance leases |  |  | (32 | ) |  |  | (164 | )
Right-of-use assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |
Operating leases |  |  | - |  |  |  | - |
|  | Three months ended June 30, |  |  | Six months ended June 30, |
|  | 2019 |  |  | 2019 |
Cash paid for amounts included in leases: |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | (67 | ) |  | $ | (189 | )
Operating cash flows from finance leases |  |  | (8 | ) |  |  | (18 | )
Financing cash flows from finance leases |  |  | (135 | ) |  |  | (272 | )
Right-of-use assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |
Operating leases |  |  | - |  |  |  | - |
Supplemental balance sheet information related to leases was as follows (in thousands):
|  | June 30, 2020 |  |  | December 31, 2019 |
Operating leases |  |  |  |  |  |
Operating lease right-of-use assets |  | $ | 227 |  |  | $ | 416 |
Current portion of operating lease obligations |  | $ | 181 |  |  | $ | 332 |
Operating lease liabilities, net of current portion |  |  | 20 |  |  |  | 58 |
Total operating lease liabilities |  | $ | 201 |  |  | $ | 390 |
Finance leases |  |  |  |  |  |  |  |
Property and equipment, at cost |  | $ | 3,360 |  |  | $ | 3,348 |
Accumulated depreciation |  |  | (2,280 | ) |  |  | (1,956 | )
Property and equipment, net |  | $ | 1,080 |  |  | $ | 1,392 |
Current portion of finance lease obligations |  | $ | 517 |  |  | $ | 568 |
Finance lease liabilities, net of current portion |  |  | 393 |  |  |  | 508 |
Total finance lease liabilities |  | $ | 910 |  |  | $ | 1,076 |
|  | June 30, 2020 |  |  | December 31, 2019 |
Weighted Average Remaining Lease Term |  |  |  |  |  |
Operating leases |  |  | 0.8 years |  |  |  | 1.2 years |
Finance leases |  |  | 1.1 years |  |  |  | 1.6 years |
Weighted Average Discount Rate: |  |  |  |  |  |  |  |
Operating leases (2) |  |  | 5 | % |  |  | 5 | %
Finance leases |  |  | 2 | % |  |  | 2 | %
| (2) | Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019
A summary of future minimum payments under non-cancellable operating lease commitments as of June 30, 2020 is as follows (in thousands):
Years ending December 31, |  | Total |
2020 (remaining months) |  | $ | 146 |
2021 |  |  | 59 |
|  |  | 205 |
Less imputed interest |  |  | (4 | )
Total lease liabilities |  | $ | 201 |
The following is a schedule of minimum future rentals on the non-cancellable finance leases as of June 30, 2020 (in thousands):
Year ending December 31, |  | Total |
2020 (remaining months) |  | $ | 175 |
2021 |  |  | 666 |
2022 |  |  | 79 |
2023 |  |  | 8 |
Total minimum payments required: |  |  | 928 |
Less amount representing interest: |  |  | (18 | )
Present value of net minimum lease payments: |  |  | 910 |
Less current portion |  |  | (517 | )
|  | $ | 393 |

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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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