Commitments and Contingencies |
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Commitments and Contingencies | 10. Commitments and Contingencies Leases All of the Company’s existing leases as of June 30, 2019 are classified as operating leases. As of June 30, 2019, the Company has one material operating lease for facilities with a remaining term expiring in 2022. The existing lease has fair value renewal options, none of which are considered certain of being exercised or included in the minimum lease term. The discount rate used in the calculation of the lease liability was 9.9%. The rates implicit within the Company’s leases are generally not determinable, therefore, the Company’s incremental borrowing rate is used to determine the present value of lease payments. The determination of the Company’s incremental borrowing rate requires judgment. Because the Company currently has no outstanding debt, the incremental borrowing rate for each lease is primarily based on publicly-available information for companies within the same industry and with similar credit profiles. The rate is then adjusted for the impact of collateralization, the lease term and other specific terms included in the Company’s lease arrangements. The incremental borrowing rate is determined at lease commencement, or as of January 1, 2019, for operating leases in existence upon adoption of ASC 842. The incremental borrowing rate is subsequently reassessed upon a modification to the lease arrangement. ROU assets are subsequently assessed for impairment in accordance with the Company’s accounting policy for long-lived assets. Operating lease costs are presented as part of the general and administrative expenses in the condensed consolidated statements of operations, and for the three and six months ended June 30, 2019 approximated $50,000 and $101,000, respectively. During the same period, operating cash flows used for operating leases approximated $75,000 and $149,000, respectively. During 2019 there were no ROU assets exchanged for operating lease obligations. The initial non-cash addition of ROU assets due to adoption of ASC 842 was $538,000. A maturity analysis of our operating leases as of June 30, 2019 is as follows (amounts in thousands of dollars):
As of December 31, 2018, the Company’s future minimum lease payments were as follows (in thousands):
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