Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

Note 12 – Leases

The Company has operating leases for corporate offices, an automobile and office equipment. The leases have remaining lease terms of 1 year to 5 years.

The Company entered into an operating lease that began in December 2017 for 380 Lackawanna Place, South Orange, New Jersey 07079, which consists of approximately 7,700 square feet of space. The rental agreement expires in November 2022 with a monthly cost of approximately $11,000. Approximately $11,000 related to a security deposit for this U.S. office facility is classified as other assets on the condensed consolidated balance sheet as of September 30, 2019 and December 31, 2018. The Company uses this facility to house its corporate headquarters and research facilities.

The Company entered into an operating lease that began in February 2019 for 211 Donelson Pike, Nashville, Tennessee 37214, for office space. The rental agreement expires in January 2021 with a monthly cost of approximately $850. Approximately $1,000 related to a security deposit for this office facility is classified as other assets on the condensed consolidated balance sheet as of September 30, 2019.

The Company entered into an operating lease in March 2019 for approximately 16,000 total square feet of office space at 3221 Polaris Avenue, Las Vegas, Nevada 89118. The rental agreement commenced in June 2019 and expires in August 2024 with a monthly cost of approximately $15,000. Approximately $20,000 related to a security deposit for this office facility is classified as other assets on the condensed consolidated balance sheet as of September 30, 2019.

As of August 31, 2019, the Company terminated its rental agreement for 591 East Sunset Road, Henderson, Nevada 89011, which consisted of approximately 8,000 total square feet of space. In connection with the lease termination, the Company and the lessor agreed to a lease termination penalty of $27,000. As of September 30, 2019, the Company recognized a lease termination liability of $20,000, consisting of the $27,000 lease termination penalty offset partially by a security deposit of $7,000. The lease termination liability is included in accrued expenses on the condensed consolidated balance sheet as of September 30, 2019. The $20,000 loss on lease termination in included in selling, general and administrative expenses on the accompanying condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2019.

The lease agreement for the Company’s office space in Ireland was entered into on August 1, 2018 and includes a twelve-month term.

The Company also has lease agreements for an automobile and office equipment.

Prior to the adoption of ASC 842, operating lease expense of approximately $37,000 and $125,000 was recognized in the Company’s condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2018, respectively.

Operating lease expense was approximately $98,000 and $214,000 for the three and nine months ended September 30, 2019, respectively, in the Company’s condensed consolidated statements of operations and comprehensive loss and includes costs associated with leases for which ROU assets have been recognized as well as short-term leases.

Supplemental cash flow information related to leases was as follows:

	Nine months ended September 30, 2019
Operating activities:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	165,000
Noncash investing and financing activities:
ROU assets obtained in exchange for lease obligations
Operating leases	$	800,000

Supplemental balance sheet information related to leases was as follows:

	September 30, 2019
Operating ROU assets	$	1,165,000
Current portion of operating lease liabilities	$	251,000
Operating lease liabilities, net of current portion		956,000
Total operating lease liabilities	$	1,207,000
Weighted average remaining lease term, operating leases		4.2 years
Weighted average discount rate, operating leases		8.0	%

As of September 30, 2019, maturities of lease liabilities were as follows:

2019 (excluding the nine months ended September 30, 2019)	$	84,000
2020		339,000
2021		333,000
2022		329,000
2023		201,000
2024		137,000
Total future minimum lease payments		1,423,000
Less imputed interest		(216,000	)
Total	$	1,207,000