Leases

12 Months Ended

Dec. 31, 2021

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 Consolidated Balance Sheets.

The Company had two operating leases during the year ended December 31, 2021. In accordance with the guidance of Topic 842, the two leases which are classified as operating leases are included in the Company's Consolidated Balance Sheet as of December 31, 2021 and 2020. 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. Lease expense is recognized 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 8.8% as the discount rate to determine the present value of lease payments. The ROU assets and corresponding operating lease liability recognized at lease inception was $1.2 million.

The weighted average discount rate used was 8.8% and the weighted average remaining lease term is 4.09 years at December 31, 2021.

The following table summarizes information related to the Company's two operating leases and are included in the Company's Balance Sheet as of December 31, 2021.


Balance Sheet descriptions
Assets:	(in thousands)
Right of use assets - operating leases	$	1,000
Liabilities:
Operating leases - current	$	338
Operating leases - long term	$	673
Total lease liabilities	$	1,011

The following table summarizes the components of operating lease cost for the year ended December 31, 2021.


Lease costs (in thousands)
Operating expenses - lease costs	$	567

As of December 31, 2021, future minimum operating leases payments related to the Company’s operating lease liabilities were as follows:


(in thousands)	December 31, 2021
2022	352
2023	231
2024	243
2025	271
2026	112
Total lease payments	1,209
Less imputed interest	$	(198)
Present value of operating lease liabilities	$	1,011