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Leases | 9 Months Ended
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Sep. 30, 2019
Leases [Abstract] |
Leases | LEASES The Company leases certain equipment, manufacturing, warehouse and office space under non-cancellable operating leases expiring through 2024 under which it is responsible for related maintenance, taxes and insurance. The Company has one finance lease containing a bargain purchase option upon expiration of lease in 2022. The lease term consists of the non-cancellable period of the lease, periods covered by options to extend the lease if the Company is reasonably certain to exercise the option, and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the option. The present value of the remaining lease obligation for these leases was calculated using an incremental borrowing rate (“IBR”) of 7.25%, which was the Company’s borrowing rate on the revolving credit agreement signed on December 11, 2018. The weighted average remaining lease term for operating, restructuring and finance leases is 2.83 years, 1.75 years, and 2.58 years, respectively. The Company has two restructured leases with sub-lease components for the New York, New York and Arlington, Virginia offices that were closed in 2017. The New York, New York lease expires in 2021 and the Arlington, Virginia lease expired in September 2019. At the “cease use” date in 2017, the Company recorded the present value of the future minimum payments under the leases and costs that continue to be incurred with no economic benefit to the Company in accordance with Topic 420. The Company entered into sub-leases for both offices and included the estimated sub-lease payments as an offset to the remaining lease obligations, as required by Topic 420. In adopting Topic 842, the carrying value of the aforementioned net liabilities has been reclassified as a reduction of the restructured lease, right-of-use asset, which totaled $0.3 million as of January 1, 2019. As part of the lease agreement for the New York, New York office, there is $0.3 million in a restricted cash account held at Key Bank which represents collateral against the related Letter of Credit issued as part of this agreement. The restructured leases and sub-leases were not scoped out of the requirements of Topic 842 and were evaluated for impairment in accordance with the asset impairment provisions of ASC 360, Property, Plant and Equipment (“Topic 360”). The Company concluded its net right-of-use assets were not impaired. The Company continues to carry certain immaterial operating expenses associated with these leases as restructuring liabilities and will continue to accrete those liabilities in accordance with Topic 420, as has been done since the cease use date in 2017. Due to the continued net losses, going concern, and 2019 restructuring actions discussed in Note 3, “Restructuring,” the Company also evaluated its Solon, Ohio operating lease right-of-use asset for potential impairment under Topic 360. As a result of this evaluation, the Company determined that the operating lease right-of-use asset for the Solon, Ohio operating lease was impaired upon the adoption of Topic 842. Therefore, the Company recorded an impairment of this right-of-use asset of approximately $0.2 million, with a corresponding offset to accumulated deficit as of January 1, 2019. Components of the operating, restructured and finance lease costs for the three and nine months ended September 30, 2019, were as follows (in thousands):
|  | Three months ended September 30, |  | Nine months ended September 30,
|  | 2019 |  | 2019
Operating lease cost |  |  |  |
Sublease income |  | $ | (25 | ) |  | $ | (75 | )
Lease cost |  | 156 |  |  | 474 |
Operating lease cost, net |  | 131 |  |  | 399 |
Restructured lease cost |  |  |  |
Sublease income |  | (111 | ) |  | (334 | )
Lease cost |  | 105 |  |  | 321 |
Restructured lease cost, net |  | (6 | ) |  | (13 | )
Finance lease cost |  |  |  |
Interest on lease liabilities |  | 1 |  |  | 2 |
Finance lease cost, net |  | 1 |  |  | 2 |
Total lease cost, net |  | $ | 126 |  |  | $ | 388 |
Supplemental balance sheet information related to the Company’s operating and finance leases as of September 30, 2019 are as follows (in thousands):
|  |  | September 30,
|  |  | 2019
Operating Leases |  |  |
Operating lease right-of-use assets |  |  | $ | 1,415 |
Restructured lease right-of-use assets |  |  | 375 |
Operating lease right-of-use assets, total |  |  | 1,790 |
Operating lease liabilities |  |  | 1,612 |
Restructured lease liabilities |  |  | 563 |
Operating lease liabilities, total |  |  | 2,175 |
Finance Leases |  |  |
Property and equipment |  |  | 13 |
Allowances for depreciation |  |  | (5 | )
Finance lease assets, net |  |  | 8 |
Finance lease liabilities |  |  | 8 |
Total finance lease liabilities |  |  | $ | 8 |
Future minimum lease payments required under operating, restructured and finance leases for each of the 12-month rolling periods below in effect at September 30, 2019 are as follows (in thousands):
|  |  | Operating Leases | Restructured Leases | Restructured Leases Sublease Payments |  | Finance Lease
October 2019 to September 2020 |  |  | $ | 636 |  | $ | 342 |  | $ | (273 | ) |  | 3 |
October 2020 to September 2021 |  |  | 636 |  | 257 |  | (204 | ) |  | 3 |
October 2021 to September 2022 |  |  | 481 |  | — |  | — |  |  | 2 |
October 2022 to September 2023 |  |  | 16 |  | — |  | — |  |  | — |
October 2023 to September 2024 |  |  | 5 |  | — |  | — |  |  | — |
Total future undiscounted lease payments |  |  | 1,774 |  | 599 |  | (477 | ) |  | 8 |
Less imputed interest |  |  | (162 | ) | (36 | ) | 28 |  |  | — |
Total lease obligations |  |  | $ | 1,612 |  | $ | 563 |  | $ | (449 | ) |  | $ | 8 |
Supplemental cash flow information related to leases for the nine months ended September 30, 2019, was as follows (in thousands):
|  |  | Nine months ended September 30,
|  |  | 2019
Supplemental cash flow information |  |  |
Cash paid, net, for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases |  |  | $ | 402 |
Operating cash flows from restructured leases |  |  | $ | 70 |
Financing cash flows from finance leases |  |  | $ | 2 |
Leases | LEASES The Company leases certain equipment, manufacturing, warehouse and office space under non-cancellable operating leases expiring through 2024 under which it is responsible for related maintenance, taxes and insurance. The Company has one finance lease containing a bargain purchase option upon expiration of lease in 2022. The lease term consists of the non-cancellable period of the lease, periods covered by options to extend the lease if the Company is reasonably certain to exercise the option, and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the option. The present value of the remaining lease obligation for these leases was calculated using an incremental borrowing rate (“IBR”) of 7.25%, which was the Company’s borrowing rate on the revolving credit agreement signed on December 11, 2018. The weighted average remaining lease term for operating, restructuring and finance leases is 2.83 years, 1.75 years, and 2.58 years, respectively. The Company has two restructured leases with sub-lease components for the New York, New York and Arlington, Virginia offices that were closed in 2017. The New York, New York lease expires in 2021 and the Arlington, Virginia lease expired in September 2019. At the “cease use” date in 2017, the Company recorded the present value of the future minimum payments under the leases and costs that continue to be incurred with no economic benefit to the Company in accordance with Topic 420. The Company entered into sub-leases for both offices and included the estimated sub-lease payments as an offset to the remaining lease obligations, as required by Topic 420. In adopting Topic 842, the carrying value of the aforementioned net liabilities has been reclassified as a reduction of the restructured lease, right-of-use asset, which totaled $0.3 million as of January 1, 2019. As part of the lease agreement for the New York, New York office, there is $0.3 million in a restricted cash account held at Key Bank which represents collateral against the related Letter of Credit issued as part of this agreement. The restructured leases and sub-leases were not scoped out of the requirements of Topic 842 and were evaluated for impairment in accordance with the asset impairment provisions of ASC 360, Property, Plant and Equipment (“Topic 360”). The Company concluded its net right-of-use assets were not impaired. The Company continues to carry certain immaterial operating expenses associated with these leases as restructuring liabilities and will continue to accrete those liabilities in accordance with Topic 420, as has been done since the cease use date in 2017. Due to the continued net losses, going concern, and 2019 restructuring actions discussed in Note 3, “Restructuring,” the Company also evaluated its Solon, Ohio operating lease right-of-use asset for potential impairment under Topic 360. As a result of this evaluation, the Company determined that the operating lease right-of-use asset for the Solon, Ohio operating lease was impaired upon the adoption of Topic 842. Therefore, the Company recorded an impairment of this right-of-use asset of approximately $0.2 million, with a corresponding offset to accumulated deficit as of January 1, 2019. Components of the operating, restructured and finance lease costs for the three and nine months ended September 30, 2019, were as follows (in thousands):
|  | Three months ended September 30, |  | Nine months ended September 30,
|  | 2019 |  | 2019
Operating lease cost |  |  |  |
Sublease income |  | $ | (25 | ) |  | $ | (75 | )
Lease cost |  | 156 |  |  | 474 |
Operating lease cost, net |  | 131 |  |  | 399 |
Restructured lease cost |  |  |  |
Sublease income |  | (111 | ) |  | (334 | )
Lease cost |  | 105 |  |  | 321 |
Restructured lease cost, net |  | (6 | ) |  | (13 | )
Finance lease cost |  |  |  |
Interest on lease liabilities |  | 1 |  |  | 2 |
Finance lease cost, net |  | 1 |  |  | 2 |
Total lease cost, net |  | $ | 126 |  |  | $ | 388 |
Supplemental balance sheet information related to the Company’s operating and finance leases as of September 30, 2019 are as follows (in thousands):
|  |  | September 30,
|  |  | 2019
Operating Leases |  |  |
Operating lease right-of-use assets |  |  | $ | 1,415 |
Restructured lease right-of-use assets |  |  | 375 |
Operating lease right-of-use assets, total |  |  | 1,790 |
Operating lease liabilities |  |  | 1,612 |
Restructured lease liabilities |  |  | 563 |
Operating lease liabilities, total |  |  | 2,175 |
Finance Leases |  |  |
Property and equipment |  |  | 13 |
Allowances for depreciation |  |  | (5 | )
Finance lease assets, net |  |  | 8 |
Finance lease liabilities |  |  | 8 |
Total finance lease liabilities |  |  | $ | 8 |
Future minimum lease payments required under operating, restructured and finance leases for each of the 12-month rolling periods below in effect at September 30, 2019 are as follows (in thousands):
|  |  | Operating Leases | Restructured Leases | Restructured Leases Sublease Payments |  | Finance Lease
October 2019 to September 2020 |  |  | $ | 636 |  | $ | 342 |  | $ | (273 | ) |  | 3 |
October 2020 to September 2021 |  |  | 636 |  | 257 |  | (204 | ) |  | 3 |
October 2021 to September 2022 |  |  | 481 |  | — |  | — |  |  | 2 |
October 2022 to September 2023 |  |  | 16 |  | — |  | — |  |  | — |
October 2023 to September 2024 |  |  | 5 |  | — |  | — |  |  | — |
Total future undiscounted lease payments |  |  | 1,774 |  | 599 |  | (477 | ) |  | 8 |
Less imputed interest |  |  | (162 | ) | (36 | ) | 28 |  |  | — |
Total lease obligations |  |  | $ | 1,612 |  | $ | 563 |  | $ | (449 | ) |  | $ | 8 |
Supplemental cash flow information related to leases for the nine months ended September 30, 2019, was as follows (in thousands):
|  |  | Nine months ended September 30,
|  |  | 2019
Supplemental cash flow information |  |  |
Cash paid, net, for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases |  |  | $ | 402 |
Operating cash flows from restructured leases |  |  | $ | 70 |
Financing cash flows from finance leases |  |  | $ | 2 |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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