Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.19.2
Leases
6 Months Ended
Jun. 30, 2019
Leases [Abstract]  
Leases

NOTE 16 - LEASES

 

The Company determines whether an arrangement is a lease at inception. The Company has operating leases for office space and office equipment. The Company’s leases have remaining lease terms of one year to seven years, some of which include options to extend the lease term for up to five years. The Company considered these options to extend in determining the lease term used to establish the Company’s right-of use assets and lease liabilities once reasonably certain of exercise. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 

Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. The operating lease ROU asset also includes any lease payments made in advance of lease commencement and excludes lease incentives. The lease terms used in the calculations of the operating ROU assets and operating lease liabilities include options to extend or terminate the lease when the Company is reasonably certain that it will exercise those options. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

 

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

 

The Company has lease agreements with lease and non-lease components, which are generally not accounted for separately.

 

Components of lease expense are as follows:

 

    Three Months Ended June 30, 2019     Six Months Ended June 30, 2019  
             
Operating lease cost   $ 210,000     $ 389,000  
Short term lease cost     100,000       144,000  
                 
    $ 310,000     $ 533,000  

 

The Company has lease arrangements which are classified as short-term in nature. The Company has elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize ROU assets or lease liabilities.

 

Supplemental cash flow information and non-cash activity related to our operating leases are as follows:

 

    Six Months Ended
June 30, 2019
 
       
Operating cash flow information:        
Cash paid for amounts included in the measurement of lease liabilities   $ 384,000  
Non-cash activity:        
Right-of-use assets obtained in exchange for lease obligations   $ 2,556,000  

 

Weighted-average remaining lease term and discount rate for our operating leases are as follows:

 

    June 30, 2019  
       
Weighted-average remaining lease term (in years)     3.8  
Weighted-average discount rate     7.5 %

 

Scheduled maturities of operating lease liabilities outstanding as of June 30, 2019 are as follows:

 

Year ending December 31,      
July - December 2019   $ 481,000  
2020     971,000  
2021     302,000  
2022     172,000  
2023     177,000  
Thereafter     416,000  
Total lease payments     2,519,000  
Less: Imputed interest     (347,000 )
Present value of lease liabilities   $ 2,172,000