Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

The Company leases space under a non-cancelable operating lease for its corporate headquarters. This lease has escalating lease terms and also includes a tenant incentive that was recorded at the time the lease was originally entered into. The lease does not contain contingent rent provisions. The Company also has a lease for additional office space under an operating lease. The lease for the Company’s corporate headquarters includes both lease (e.g., fixed payments including rent, taxes, and insurance costs) and non-lease components (e.g., fixed common-area or other maintenance costs) which are accounted for as a single lease component as the Company elected the practical expedient to group lease and non-lease components for all leases. The lease for the Company’s additional office space is non-cancelable with a lease term of less than one year and therefore, the Company elected the practical expedient to exclude this short-term lease from the Company’s right-of-use assets and lease liabilities.

The Company’s incremental borrowing rate used in determining the present value of the lease payments was based on information available at the lease commencement date.

The cost components of the Company’s operating leases were as follows for the years ended December 31, 2020 and 2019:

	Year ended December 31, 2020
	Corporate		Additional		Operating
	Headquarters		Office Space		Leases
Operating lease cost	$	150,000	$	-	$	150,000
Variable lease cost		104,000		-		104,000
Short-term lease cost		-		40,000		40,000
Total	$	254,000	$	40,000	$	294,000

	Year ended December 31, 2019
	Corporate		Additional		Operating
	Headquarters		Office Space		Leases
Operating lease cost	$	150,000	$	-	$	150,000
Variable lease cost		106,000		-		106,000
Short-term lease cost		-		38,000		38,000
Total	$	256,000	$	38,000	$	294,000

Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for the Company’s leased corporate headquarters which are paid based on actual costs incurred by the lessor.

Maturities of the Company’s lease liabilities for its corporate headquarters operating lease were as follows as of December 31, 2020:

2021	$	57,000
Less: Interest		1,000
Present value of lease liabilities	$	56,000

The remaining lease term as of December 31, 2020 and 2019, was 0.25 years and 1.25 years, respectively. The discount rate as of both December 31, 2020 and 2019 was 6%. The cash outflow for operating leases for the years ended December 31, 2020 and December 31, 2019 was $222,000 and $217,000, respectively.

The Company plans to enter into a lease for a new operations center in suburban Minneapolis for a two-year term commencing in March 2021. The Company also plans to enter into a lease by April 2021 for new headquarters near downtown Minneapolis.