Leases

9 Months Ended

Sep. 30, 2021

Leases

Leases

6. Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. The Company adopted ASU No. 2016-02 on January 1, 2019.

The Company has no finance leases and one operating lease for office space in Princeton, NJ. Operating lease expense was $38,000 and $113,000 for the three and nine months ended September 30, 2021, respectively. The current operating lease is set to expire on December 31, 2021.

Operating cash flows used for operating leases during the three and nine months ended September 30, 2021 were $35,000 and $102,000, respectively. As of September 30, 2021, the weighted-average remaining lease term was 0.25 years and the weighted average discount rate was 15.2%.

Future minimum lease payments under non-cancellable leases as of September 30, 2021 were as follows (in thousands):

2021	$	38
Total	$	38
Less: Interest		(1)
Present value of lease liability	$	37

In addition to the above lease, the Company has entered into a lease for new office space that has not yet commenced. This lease will commence on the later of December 1, 2021 or the date on which certain building improvements are substantially completed, all as set forth in the lease (the “Commencement Date”). The term of the lease is forty months following the Commencement Date. Upon the Commencement Date, prepaid costs and minimum guarantees specified in the agreement will be combined to establish an operating lease ROU asset and operating lease liability.