Leases

6 Months Ended

Jan. 31, 2020

Leases [Abstract]

Leases

Note 12— Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Operating leases are included in other assets, accrued expenses and other current liabilities, and other liabilities on the Company's Consolidated Balance Sheets. The Company does not have any finance leases.

Leases with a term greater than one year are recognized on the Consolidated Balance Sheet as right-of-use ("ROU") assets, lease obligations and, if applicable, long-term lease obligations in the line items cited above. The Company has elected not to recognize leases with terms of one year or less on the Consolidated Balance Sheets. Lease obligations and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term. As the interest rate implicit in lease contracts is typically not readily determinable, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The lease term may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

The Company has elected to combine lease components (including land, building or other similar items) and non-lease components (including common area maintenance, maintenance, consumables, or other similar items) as a single component and therefore the non-lease components are included the calculation of the present value of lease payments. The lease expense is recognized over the expected term on a straight-line basis.

The Company currently leases 11,578 square feet of office space for its technology development center located in Trondheim, Norway, under a noncancelable lease that expires in 2021. The Company uses these facilities to accommodate its product, design and technology team. Additionally, the Company also has short-term leases for its offices in 1) New York to house its commercial operations including sales, accounting and finance, and business development, 2) Vilnius, Lithuania, a satellite development center and 3) Bodo, Norway that meet short-term lease criteria and are not recognized on the Consolidated Balance Sheets. Most leases include one or more options to renew, and the exercise of these options is at the Company's sole discretion. The Company determined that its options to break or renew would not be reasonably certain in determining the expected lease term, and therefore are not included as part of its ROU assets and lease liabilities.

In calculating the present value of the lease payments, the Company has elected to utilize its estimated incremental borrowing rate based on the remaining lease term and not the original lease term. The depreciable life of assets and leasehold improvements are limited by the expected lease term.

The elements of lease expense were as follows (in thousands): 

	Three Months Ended January 31, 2020		Six Months Ended January 31, 2020
Operating lease cost	$	59	$	117
Other lease cost, net (1)		37		69
Total lease cost	$	96	$	186

(1) Other lease cost, net includes short-term lease costs and variable lease costs, which are immaterial.

The following table presents the lease-related assets and liabilities recorded on the Consolidated Balance Sheet (in thousands):

Operating leases:	As of January 31, 2020
Other assets	$	417
Other current liabilities	$	214
Other liabilities		183
Total operating lease liabilities	$	397

The following table summarizes the weighted average remaining lease term and weighted average discount rate as of January 31, 2020:

	As of January 31, 2020
Weighted average remaining lease term:
Operating leases		1.92 years
Weighted average discount rate:
Operating leases		5.00	%

Supplemental cash flow information related to leases was as follows (in thousands):

	Six Months Ended  January 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	154

Future minimum lease payments under non-cancelable leases for the years ending July 31, 2020, 2021, 2022, and thereafter are as follows (in thousands):

	Operating Leases
2020	$	76
2021		240
2022		103
Total future minimum lease payments		419
Less imputed interest		22
Total	$	397

As of January 31, 2020, the Company did not have any leases that have not yet commenced that create significant rights and obligations.