Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

LEASES

NOTE 3:- LEASES

The Company adopted the new standard as of January 1, 2019, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at adoption and in comparative periods that approximates the results of a full retrospective approach. The Company has elected to utilize the available package of practical expedients permitted under the transition guidance within the new standard which does not require it to reassess the prior conclusions about lease identification, lease classification and initial direct costs.

In addition, the Company has elected the short-term lease exception for leases with a term of 12 months or less. As part of this election it will not recognize right-of-use assets and lease liabilities on the balance sheet for leases with terms less than 12 months. The Company also elected the practical expedient to not separate lease and non-lease components for all our leases. This will result in the initial and subsequent measurement of the balances of the right-of-use asset and lease liability being greater than if the policy election was not applied.

Some leases include one or more options to extend the lease. The exercise of options to extend the lease is typically at the Company’s sole discretion; therefore, the majority of renewals to extend the lease terms are included in our right of use assets and lease liabilities as they are reasonably certain of exercise. The Company regularly evaluates the renewal options, and, when it is reasonably certain of exercise, it will include the renewal period in its lease term. Lease modifications result in remeasurement of the lease liability. 

The right-of-use asset and lease liability are initially measured at the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate based on the information available at the date of adoption in determining the present value of the lease payments.

Some of the real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease adoption. Additional payments based on the change in an index or rate are recorded as a period expense when incurred. 

Income from subleased properties is recognized and presented as a reduction of costs, allocated among operating expense line items, in the Company’s Consolidated Statements of Operations and Comprehensive Loss. In addition to sublease rent, variable non-lease costs such as common-area maintenance and utilities are charged to subtenants over the duration of the lease for their proportionate share of these costs. These variable non-lease income receipts are recognized in operating expenses as a reduction to costs incurred by the Company in relation to the head lease.

The Company has various operating leases for office space and vehicles that expire through 2030. Below is a summary of our operating right-of-use assets and operating lease liabilities as of June 30, 2020:

Operating lease right-of-use assets	$	11,466
Operating lease liabilities, current	$	1,886
Operating lease liabilities long-term		9,966
Total operating lease liabilities	$	11,852

The short-term lease liabilities are included within accrued expenses and other short-term liabilities in the consolidated balance sheet.

Minimum lease payments for our right of use assets over the remaining lease periods as of June 30, 2020, are as follows:

Year ended December 31,
2020	$	1,179
2021		2,288
2022		1,690
2023		1,496
2024		1,528
Thereafter		5,704
Total undiscounted lease payments	$	13,885
Less: Interest		2,033
Present value of lease liabilities	$	11,852

Premises rent expense was $732 and $565 for the three months ended June 30, 2020 and 2019, respectively and $1,386 and $1,101 for the six months ended June 30, 2020 and 2019, respectively.

As of June 30, 2020, Cyren subleases two real estate properties. Sublease receipts were $119 and $69 for the three months ended June 30, 2020 and 2019 respectively and $190 and $138 for the six months ended June 30, 2020 and 2019, respectively.

The Company has elected the practical expedient to not separate lease components from non-lease components. 

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of June 30, 2020:

Remaining lease term and discount rate:
Weighted average remaining lease term (years)	7.5
Weighted average discount rate	4.36	%