LEASES

The Company leases all of its office spaces and has various operating leases that expire through 2024. On January 1, 2019 ("Adoption Date"), the Company adopted ASC 842, Leases, using the alternative modified transition method to apply the standard and measure leases existed at, or entered into after the Adoption Date. Upon adoption of ASC 842, the Company recognized operating lease liabilities of $4.9 million, which represents the present value of the remaining lease payments of outstanding leases as of the Adoption Date using an estimated incremental borrowing rate of 3.25%, which is also the Company's weighted average interest rate as of March 31, 2019. The Company also recognized ROU assets of $4.0 million which represent the Company's right to use an underlying asset for the lease term. In conjunction with the adoption of ASC 842, the Company elected the following practical expedients: (i) combining lease and non-lease components, (ii) leases with an initial term of 12 months or less are not recorded in the condensed consolidated balance sheets, and the associated lease payments are recognized in the condensed consolidated statements of operations on a straight-line basis over the lease term, and (iii) applying discount rates to operating leases using a portfolio approach.

There was no cumulative-effect adjustment recognized on the beginning retained earnings as a result of the adoption. The comparative periods presented in this Form 10-Q reflect the former lease accounting guidance.

Below is a summary of our ROU assets and lease liabilities as of the Adoption Date and March 31, 2019, respectively (in thousands):



	Balance Sheets Classification	March 31, 2019		January 1, 2019
Assets
Operating lease assets	Other assets	$	3,828	$	4,048
Liabilities
Operating lease liabilities - current	Other current liabilities	1,165		1,157
Operating lease liabilities - long-term	Other long-term liabilities	3,445		3,693
Total lease liabilities		$	4,610	$	4,850

The table below provides supplemental information related to operating leases during the three months ended as of March 31, 2019 (in thousands except for lease term):



Cash paid within operating cash flow		$281
Weighted average lease terms (in years)		4.08

Operating lease ROU assets and liabilities commencing after the Adoption Date are recognized at commencement date based on the present value of lease payments over the lease term. Under ASC 842, all operating lease expenses are recognized on a straight-line basis over the lease term. During the three months ended March 31, 2019, the Company recognized operating lease expense of $265,000 compared to $319,000 for the three months ended March 31, 2018. As of December 31, 2018, the Company had $764,000 in deferred rent which represented unamortized lease incentives on its outstanding leases and was recorded as a reduction to the ROU assets recognized at the Adoption Date.

Minimum future lease payments obligations as of March 31, 2019 are as follows (in thousands):



For the Years Ending December 31,
2019	$	947
2020	1,209
2021	1,189
2022	1,166
2023	452
Thereafter	24
Total	$	4,987