Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

Note 6. Leases

On August 9, 2016, the Company entered into an office sublease agreement in Durham, North Carolina. The lease commenced on September 1, 2016 and had an expiration date of January 31, 2020. The Company terminated the sublease agreement in December 2019 in connection with the relocation of its executive office to Raleigh, North Carolina. The Company accounted for this termination by removing the right of use asset and lease liability. There was no impact on the statement of operations, The sublease security deposit of $13 was recovered in full. Under the sublease agreement, monthly rent was $6 for the first 12 -month period and $7 each month thereafter.

The Company accounted for its new office lease as an operating lease under the guidance of Topic 842. Rent expense under the new lease is $3 per month, with annual increases of 3% during the three-year term. The Company used an incremental borrowing rate of 29.91% based on the weighted average effective interest rate of its outstanding debt. In December 2019, the Company recorded a Right of Use Asset of $79 and a corresponding Lease Liability of $79. The Right to Use Asset is accounted for as an operating lease and has a balance, net of amortization of $78 at December 31, 2019.

Total future minimum payments required under the lease agreement are as follows:

Years ended December 31,	Amount
2020	$	36
2021		37
2022		39
Total undiscounted minimum future lease payments	$	112
Less Imputed interest		(34	)
Present value of operating lease liabilities	$	78
Disclosed as:
Current portion	$	19
Non-current portion		59
	$	78

The Company recorded rent expense of $64 and $77 for the years ended December 31, 2019 and 2018, respectively.