Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

6. LEASES

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability, measured on a discounted basis, on the balance sheet for all leases with terms longer than 12 months. Effective January 1, 2019, the Company adopted the provisions of Topic 842 using the alternative modified transition method, with a cumulative effect adjustment to the opening balance of retained earnings on the date of adoption, and prior periods not restated, as allowed under the provisions of Topic 842. The Company also elected to use the practical expedients permitted under the transition guidance of Topic 842, which provides for the following: the carryforward of the Company’s historical lease classification, no requirement for reassessment of whether an expired or existing contract contains an embedded lease, no reassessment of initial direct costs for any leases that exist prior to the adoption of the new standard, and the election to consolidate lease and non-lease components. The Company also elected to keep all leases with an initial term of 12 months or less off the balance sheet.

The Company recorded $2.4 million of right-of-use lease assets and $2.5 million of lease liabilities upon adoption, primarily relating to rentals of space for our corporate headquarters and laboratories, as well as equipment leases, all under operating leases. In addition, the Company recorded a cumulative adjustment to opening accumulated deficit of $0.1 million.

The table below presents the lease-related assets and liabilities recorded in the Condensed Consolidated Balance Sheet:

	Classification on the Balance Sheet	March 31, 2019
			(unaudited)
Assets
Operating lease assets	Operating lease assets	$	2,320
Total lease assets		$	2,320
Liabilities
Current
Operating lease liabilities	Other accrued expenses	$	526
Noncurrent
Operating lease liabilities	Operating lease liabilities		1,899
Total lease liabilities		$	2,425

The weighted average remaining lease term for the Company’s operating leases was 4.1 years as of March 31, 2019 and the weighted average discount rate for those leases was 6.0%. The Company’s operating lease expenses are recorded within cost of revenue and general and administrative expenses.

The table below reconciles the undiscounted cash flows to the operating lease liabilities recorded on the Company’s Condensed Consolidated Balance Sheet as of March 31, 2019:

	Operating Leases
		(unaudited)
2019	$	495
2020		675
2021		671
2022		629
2023		250
Total minimum lease payments		2,720
Less: amount of lease payments representing effects of discounting		295
Present value of future minimum lease payments		2,425
Less: current obligations under leases		526
Long-term lease obligations	$	1,899

As of December 31, 2018, contractual obligations with terms exceeding one year and estimated minimum future rental payments required by non-cancelable operating leases with initial or remaining lease terms exceeding one year were as follows:

			Less than		1 to 3		3 to 5		After
	Total		1 Year		Years		Years		5 Years
Operating lease obligations	$	2,814	$	613	$	1,322	$	879	$	-
Contractual obligation		-		-		-		-		-
Total	$	2,814	$	613	$	1,322	$	879	$	-