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Leases | 9 Months Ended
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Sep. 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 two months to 2.42 years, and one of our two primary operating leases includes an option to extend the lease for another three years. This primary operating lease also includes an option to terminate the lease by October 1, 2021. The other primary operating lease has been terminated effective November 30, 2020 and a new lease has been signed for three years beginning December 1, 2020. 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. We report operating lease assets, as well as operating lease current and noncurrent obligations on our consolidated 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 consolidated 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 September 30, 2020 |  |  | Nine Months Ended September 30, 2020 |
Operating lease cost (1) |  | $ | 139 |  |  | $ | 381 |
Finance lease cost: |  |  |  |  |  |  |  |
Amortization of leased assets |  | $ | 164 |  |  | $ | 467 |
Interest on lease liabilities |  |  | 3 |  |  |  | 15 |
Total finance lease cost |  | $ | 167 |  |  | $ | 482 |
(1) | Includes short term lease costs of $30,000 and $81,000 for the three and nine months ended September 30, 2020, respectively.
|  | Three Months Ended September 30, 2019 |  |  | Nine Months Ended September 30, 2019 |
Operating lease cost (1) |  | $ | 145 |  |  | $ | 454 |
Finance lease cost: |  |  |  |  |  |  |  |
Amortization of leased assets |  | $ | 153 |  |  | $ | 471 |
Interest on lease liabilities |  |  | 8 |  |  |  | 26 |
Total finance lease cost |  | $ | 161 |  |  | $ | 497 |
(1) | Includes short term lease costs of $27,000 and $93,000 for the three and nine months ended September 30, 2019, respectively.
Supplemental cash flow information related to leases was as follows (in thousands):
|  | Three Months Ended September 30, 2020 |  |  | Nine Months Ended September 30, 2020 |
Cash paid for amounts included in leases: |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | (115 | ) |  | $ | (298 | )
Operating cash flows from finance leases |  |  | (3 | ) |  |  | (15 | )
Financing cash flows from finance leases |  |  | (21 | ) |  |  | (185 | )
Right-of-use assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |
Operating leases |  |  | 25 |  |  |  | - |
|  | Three months ended September 30, |  |  | Nine months ended September 30, |
|  | 2019 |  |  | 2019 |
Cash paid for amounts included in leases: |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | (109 | ) |  | $ | (298 | )
Operating cash flows from finance leases |  |  | (8 | ) |  |  | (26 | )
Financing cash flows from finance leases |  |  | (131 | ) |  |  | (403 | )
Right-of-use assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |
Operating leases |  |  | - |  |  |  | - |
Supplemental balance sheet information related to leases was as follows (in thousands):
|  | September 30, 2020 |  |  | December 31, 2019 |
Operating leases |  |  |  |  |  |
Operating lease right-of-use assets |  | $ | 155 |  |  | $ | 416 |
Current portion of operating lease obligations |  | $ | 118 |  |  | $ | 332 |
Operating lease liabilities, net of current portion |  |  | - |  |  |  | 58 |
Total operating lease liabilities |  | $ | 118 |  |  | $ | 390 |
Finance leases |  |  |  |  |  |  |  |
Property and equipment, at cost |  | $ | 3,491 |  |  | $ | 3,348 |
Accumulated depreciation |  |  | (2,533 | ) |  |  | (1,956 | )
Property and equipment, net |  | $ | 958 |  |  | $ | 1,392 |
Current portion of finance lease obligations |  | $ | 650 |  |  | $ | 568 |
Finance lease liabilities, net of current portion |  |  | 277 |  |  |  | 508 |
Total finance lease liabilities |  | $ | 927 |  |  | $ | 1,076 |
|  | September 30, 2020 |  |  | December 31, 2019 |
Weighted Average Remaining Lease Term |  |  |  |  |  |
Operating leases |  |  | 0.7 years |  |  |  | 1.2 years |
Finance leases |  |  | 1.2 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 September 30, 2020 is as follows (in thousands):
Years ending December 31, |  | Total |
2020 (remaining months) |  | $ | 47 |
2021 |  |  | 74 |
|  |  | 121 |
Less imputed interest |  |  | (3 | )
Total lease liabilities |  | $ | 118 |
The following is a schedule of minimum future rentals on the non-cancellable finance leases as of September 30, 2020 (in thousands):
Year ending December 31, |  | Total |
2020 (remaining months) |  | $ | 131 |
2021 |  |  | 721 |
2022 |  |  | 82 |
2023 |  |  | 8 |
Total minimum payments required: |  |  | 942 |
Less amount representing interest: |  |  | (15 | )
Present value of net minimum lease payments: |  |  | 927 |
Less current portion |  |  | (650 | )
|  | $ | 277 |

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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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