Leases

6 Months Ended

Jun. 30, 2022

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 had two operating leases with terms greater than 12 months during the six months ended June 30, 2022. In accordance with the guidance of Topic 842, the leases which are classified as operating leases must be included in the Company's Condensed Consolidated Balance Sheets. Lease one was included in the Company's Condensed Balance Sheets at June 30, 2022. The other lease was not included in the Company's Condensed Balance Sheets at June 30, 2022 as the lease had not commenced at June 30, 2022. The Company's 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 uses judgement to estimate the incremental borrowing rate which is used as the discount rate to determine the present value of lease payments. The weighted average discount rate used was 8.8% and the weighted average remaining lease term is 3.92 years.

The following table summarizes information related to the Company's operating leases and are included in the Company's Balance Sheet as of June 30, 2022.


Balance Sheet descriptions	June 30, 2022
Assets:	(in thousands)
Right of use assets - operating leases	$	733
Liabilities:
Operating leases - current	227
Operating leases - long term	523
Total lease liabilities:	$	750

The following table summarizes the components of operating lease cost for the three and six months ended June 30, 2022:


Lease costs, (in thousands)	Three months ended June 30, 2022		Six months ended June 30, 2022
Operating expenses lease costs	$	149	$	246

As of June 30, 2022, future minimum operating leases payments related to the Company’s operating lease liabilities were as follows:


(in thousands)	June 30, 2022
2022 (six months remaining)	122
2023	208
2024	218
2025	243
2026	101
Total lease payments	892
Less imputed interest	(142)
Present value of operating lease liabilities	$	750