Leases

9 Months Ended

Sep. 30, 2021

Leases

Leases

Note 6. Leases

In December 2019, the Company entered an office lease in connection with the relocation of its executive office to Raleigh, North Carolina. The Company accounted for this 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 $40 as of September 30, 2021.

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

	Amount
Remainder of 2021	$	38
2022		9
Total undiscounted minimum future lease payments	$	47
Less Imputed interest		(8	)
Present value of operating lease liabilities	$	39
Disclosed as:
Current portion	$	30
Non-current portion		9
	$	39

The Company recorded rent expense of $9 and $9 for the three months ended September 30, 2021 and 2020, respectively, and $27 and $27 for the nine months ended September 30, 2021 and 2020, respectively.

At September 30, 2021, the weighted average remaining lease term for operating lease was 1.3 years. The Company’s lease agreement does not contain any material residual value guarantees or material restrictive covenants.