Quarterly report pursuant to Section 13 or 15(d)


3 Months Ended
Mar. 31, 2019
Leases [Abstract]  



In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability, measured on a discounted basis, on the balance sheet for all leases with terms longer than 12 months. Effective January 1, 2019, the Company adopted the provisions of Topic 842 using the alternative modified transition method, with a cumulative effect adjustment to the opening balance of retained earnings on the date of adoption, and prior periods not restated, as allowed under the provisions of Topic 842. The Company also elected to use the practical expedients permitted under the transition guidance of Topic 842, which provides for the following: the carryforward of the Company’s historical lease classification, no requirement for reassessment of whether an expired or existing contract contains an embedded lease, no reassessment of initial direct costs for any leases that exist prior to the adoption of the new standard, and the election to consolidate lease and non-lease components. The Company also elected to keep all leases with an initial term of 12 months or less off the balance sheet.


The Company recorded $2.4 million of right-of-use lease assets and $2.5 million of lease liabilities upon adoption, primarily relating to rentals of space for our corporate headquarters and laboratories, as well as equipment leases, all under operating leases. In addition, the Company recorded a cumulative adjustment to opening accumulated deficit of $0.1 million.


The table below presents the lease-related assets and liabilities recorded in the Condensed Consolidated Balance Sheet:


    Classification on the Balance Sheet   March 31, 2019  
Operating lease assets   Operating lease assets   $ 2,320  
Total lease assets       $ 2,320  
Operating lease liabilities   Other accrued expenses   $ 526  
Operating lease liabilities   Operating lease liabilities     1,899  
Total lease liabilities       $ 2,425  


The weighted average remaining lease term for the Company’s operating leases was 4.1 years as of March 31, 2019 and the weighted average discount rate for those leases was 6.0%. The Company’s operating lease expenses are recorded within cost of revenue and general and administrative expenses.


The table below reconciles the undiscounted cash flows to the operating lease liabilities recorded on the Company’s Condensed Consolidated Balance Sheet as of March 31, 2019:


    Operating Leases  
2019   $ 495  
2020     675  
2021     671  
2022     629  
2023     250  
Total minimum lease payments     2,720  
Less: amount of lease payments representing effects of discounting     295  
Present value of future minimum lease payments     2,425  
Less: current obligations under leases     526  
Long-term lease obligations   $ 1,899  


As of December 31, 2018, contractual obligations with terms exceeding one year and estimated minimum future rental payments required by non-cancelable operating leases with initial or remaining lease terms exceeding one year were as follows:


          Less than     1 to 3     3 to 5     After  
    Total     1 Year     Years     Years     5 Years  
Operating lease obligations   $ 2,814     $ 613     $ 1,322     $ 879     $ -  
Contractual obligation     -       -       -       -       -  
Total   $ 2,814     $ 613     $ 1,322     $ 879     $ -