3. Operating Lease

3 Months Ended

Mar. 29, 2019

Notes to Financial Statements

3. Operating Lease

3.    OPERATING LEASE

The Company adopted Topic 842, Leases, effective January 1, 2019 and adjusted the 2018 comparative period presented by applying the new standard as of January 1, 2018. As a result, the 2018 periods presented for comparative purpose have been adjusted to reflect the application of Topic 842 with an adjustment to opening balance of stockholders’ equity at January 1, 2018 for cumulative effect of the initial application (see Note 4).

The Company leases its office, shop and warehouse space in Salt Lake City, Utah under a non-cancellable operating lease agreement with an amended term that ended on April 30, 2019 (the “Facility Lease”). On April 15, 2019, the Company signed an amendment to the Facility Lease, for newly defined space with a term beginning on May 1, 2019 (see Note 7).  

As a result of the adoption of ASC 842, the Company recognized an operating liability with a corresponding right-of-use (“ROU”) asset of the same amount based on the present value of the minimum rental payments of the Facility Lease as of January 1, 2018.   The discount rate used to compute the present value of the minimum rental payments of the lease is the Company’s estimated borrowing rate of 7.5%.  The operating lease expense is computed on straight-line basis which amounted to $142 reported as rent expense in each of the three-month periods presented.

Balance sheet information related to the lease is as follows:

	March 29,		December 31,
	2019		2018
Operating lease right-of-use asset	$	49	$	187
Operating lease liability, current portion		49		188

Maturities of the lease liability is as follows:

Future Minimum Lease Payments
2019	$	47

Other information related to the lease:

	March 29,		March 30,
	2019		2018
Operating cashflows
Cash paid related to operating lease obligation	$	143	$	137
Remaining lease term (in years)
Operating lease		0.08		1.08