Note 10 - Leases

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

10.

     LEASES

Adoption of ASC

842,

"Leases"

On

January 1, 2019,

we adopted ASC

842

using the modified retrospective method outlined in ASU

2018

-

11

"Leases (Topic

842

) Targeted Improvements." Results for reporting periods beginning after

January 1, 2019 

are presented under ASC

842,

while prior period amounts are

not

adjusted and continue to be reported in accordance with our legacy accounting under Accounting Standards Codification Topic

840:

Leases (ASC

840

). The Company recorded the transition to ASC

842

by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented.

We have elected the package of practical expedients permitted under the transition guidance, which among other things, allow us to carry forward the historical accounting relating to lease identification and classification for existing leases upon adoption. We have also elected the practical expedient to

not

separate lease and non-lease components for the majority of our leases and the election to keep leases with an initial term of

12

months or less off of the consolidated balance sheet.

The cumulative effect of the changes made to our

January 1, 2019 

consolidated balance sheet for the adoption of ASC

842

were as follows:

	Balance at December 31, 2018			Adjustments Upon Adoption of ASC 842			Balance at January 1, 2019
Assets
Right-of-use operating lease assets	$	—		$	832		$	832
Liabilities
Other accrued liabilities		6,099			(22	)		6,077
Operating lease liabilities - current		—			522			522
Operating lease liabilities - non-current		—			310			310
Equity
Accumulated deficit		(102,495	)		22			(102,473	)

The adjustment made to the

January 1, 2019 

consolidated balance sheet related to an accrued liability for lease escalation clauses in certain of our leases under ASC

840

which is a cumulative-effect adjustment to the opening balance of accumulated deficit upon the adoption of ASC

842.

Leases

The terms of the Company's

three

 primary office space lease arrangements are as follows:

• The Gallarate, Italy building lease, for approximately 1,335  square feet, runs from May 1, 2019 to April  30, 2025. This facility serves as the operating headquarters for our European operations.

• The Aurora, IL warehouse lease, for approximately 11,000 square feet, runs from September 1, 2013 to December 31, 2020. This facility serves as an outside warehouse facility. On January 30, 2020, the Company extended the lease for three years to expire on December 31, 2023.

• The Overland Park, KS lease, for approximately 600 square feet, runs from October 16, 2018 to October 15, 2021. This facility serves primarily as a sales office.

The Company also has

four

additional operating leases related to certain office equipment and company leased vehicles. Our leases have remaining lease terms of

1

year to

4

 years. Our leases do

not

contain any material residual value guarantees or material restricted covenants and we currently have

no

material sublease arrangements. We have

no

financing leases as defined under ASC

842.

Total operating lease expense for the years ended

December 31, 2020

 is as follows:

		2020		2019
Operating lease cost	$	205	$	555
Short-term lease cost		20		136
Total lease cost	$	225	$	691

The weighted average remaining lease term was

3.04

 years as of

December 31, 2020

. The weighted average discount rate was

4.68%

as of

December 31, 2020

. An incremental borrowing rate of

5.25%

was used for the properties in the United States and a rate of

2.67%

for our lease in Italy.

Remaining maturities of our existing lease liabilities as of

December 31, 2020

were as follows:

Year Ending December 31,	Operating Leases
2021		177
2022		123
2023		116
2024		27
Thereafter		10
Total lease payments	$	453
Less imputed interest		(67	)
Total	$	386

The following is the balance sheet classification of our existing lease liabilities:

	2020		2019
Operating lease liabilities - current	$	149	$	182
Operating lease liabilities - non-current		237		180
Total operating lease liabilities	$	386	$	362

Supplemental cash flow information related to leases was as follows:

	For the Twelve Months ended December 31, 2020		For the twelve months ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities	$	192	$	541
Leased assets obtained in exchange for operating lease liabilities		179		520