Leases

9 Months Ended

Sep. 30, 2020

On January 1, 2019, the Company adopted a new accounting standard, Topic 842, that amends the guidance for the accounting and reporting of leases. Leases with terms of 12 months or less are expensed on a straight-line basis over the term and are not recorded in the Company's Condensed Consolidated Balance Sheets.

The Company entered into two operating leases during 2019 with terms greater than 12 months. In accordance with the guidance of Topic 842, the two leases which are classified as operating leases are included in the Company's Condensed Consolidated Balance Sheets. The Company's two operating leases do not include options to renew, do not contain residual value guarantees, do not have variable lease components, or impose significant restrictions or covenants.

Right of use assets, "ROU assets", represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments over the respective lease term, with the ROU asset adjusted for deferred rent liability. The ROU asset is recognized as lease expense on a straight line basis over the lease term. As the implicit rate on the leases is not determinable, the Company used an estimated incremental borrowing rate of 9% as the discount rate to determine the present value of lease payments. The weighted average discount rate used was 9% and the weighted average remaining lease term is 0.79 years. The ROU asset and corresponding operating lease liability recognized at lease inception in 2019 was $0.95 million.

The following table summarizes information related to the Company's two operating leases and are included in the Company's Balance Sheet as of September 30, 2020.


Balance Sheet descriptions	September 30, 2020
Assets:	(in thousands)
Right of use assets - operating leases	$	397
Liabilities:
Operating leases - current	$	401
Total lease liabilities:	$	401

The following table summarizes the components of operating lease cost for the three and nine months ended September 30, 2020:


Lease costs, (in thousands)	Three months ended September 30, 2020		Nine months ended September 30, 2020
Operating expenses lease costs	$	143	$	365

As of September 30, 2020, future minimum operating leases payments related to the Company’s operating lease liabilities were as follows for the subsequent years ended December 31:


(in thousands)	September 30, 2020
2020 (three months remaining)	134
2021	283
Total lease payments	417
Less imputed interest	(16)
Present value of operating lease liabilities	$	401