Leases

12 Months Ended

Dec. 31, 2019

As discussed in Note 3, on January 1, 2019, the Company adopted new guidance for the accounting and reporting of leases. The Company has operating leases primarily for corporate offices, vehicles, and certain equipment. Such leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. The Company determines if an arrangement is or contains a lease at inception.

Under ASC 842 transition guidance, the Company has not elected the hindsight practical expedient to determine the lease term for existing leases, which permits companies to consider available information prior to the effective date of the new guidance as to the actual or likely exercise of options to extend or terminate the lease. Certain of the Company’s leases include renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liabilities and right of use assets as the Company is not reasonably certain to exercise the options.

Lease expense for operating lease payments is recognized on a straight-line basis over the term of the lease. Operating lease assets and liabilities are recognized based on the present value of lease payments over the lease term. Since most of the Company’s leases do not have a readily determinable implicit discount rate, the Company uses its incremental borrowing rate to calculate the present value of lease payments determined using the rate of interest that the Company would have to pay on collaterialized or secured borrowing over a similar term. As a practical expedient, the Company has made an accounting policy election not to separate lease components from non-lease components in the event that the agreement contains both. The Company includes both the lease and non-lease components for purposes of calculating the right-of-use asset and related lease liability.

The Company does not act as a lessor or have any leases classified as financing leases.

Operating lease cost was $1.5 million for the year ended December 31, 2019 and was recorded in Selling, general, and administrative expenses. Interest on lease obligations was $0.5 million for the year ended December 31, 2019 and was recorded in Selling, general, and administrative expenses. Cash paid for amounts included in the measurement of operating lease liabilities was $1.7 million at December 31, 2019. The amortization of leased assets for the year ended December 31, 2019 was $0.9 million.

Supplemental balance sheet information related to operating leases is as follows (amounts in thousands, except lease term and discount rate):



		December 31, 2019
Assets
	Right of use asset	$	3,397

Liabilities
	Short term lease liability	$	1,168
	Long term lease liability	$	2,919

Weighted-average remaining lease term (years)		3.1 years
Weighted-average discount rate		11.5		%

Maturities of operating leases liabilities are as follows (amounts in thousands):



Year ending December 31,	Maturities
2020	$	1,561
2021	1,528
2022	1,552
2023	196
2024	—
Thereafter	—
Total lease payments	4,837
Less: imputed interest	(750		)
	$	4,087

Future minimum lease payments under operating leases at December 31, 2018 and thereafter were as follows (amounts in thousands):



Year ending December 31,
2019	$	1,640
2020	1,579
2021	1,625
2022	1,673
2023	205
Thereafter	—
Total lease payments	$	6,722