Leases (Tables)

3 Months Ended

Mar. 31, 2019

Classification of Operating ROU Assets and Lease Liabilities on the Balance Sheet

Lease contracts are evaluated at inception to determine whether they contain a lease, where the Company obtains the right to control an identified asset. The following table summarizes the classification of operating ROU assets and lease liabilities on the consolidated balance sheets (in thousands):

Operating Leases	Classification	March 31, 2019
Leased Assets
Operating lease - right of use assets	Long term assets	$	4,331

Lease Liabilities
Operating lease liabilities - Current	Other current liabilities		1,088
Operating lease liabilities	Long term liabilities		3,703
		$	4,791

Lease Income and Expenses

The table below summarizes the lease income and expenses recorded in the consolidated statement of operations incurred during the three months ended March 31, 2019, (in thousands):

Lease Cost	Classification	Three Months Ended March 31, 2019
Operating lease cost ⁽¹⁾	Selling, general and administrative expenses	$	228
Short-term leases costs ⁽²⁾	Selling, general and administrative expenses		38
Sublease income⁽³⁾	Selling, general and administrative expenses		(16	)
Net lease cost		$	250

⁽¹⁾ Includes variable lease costs which are immaterial.

⁽²⁾ Include leases maturity less than twelve months from the report date.

⁽³⁾Sublease portfolio consists of the sublease part of our principal executive office located at 1332 Londontown Blvd, Suite 200, Sykesville, MD.

Future Minimum Lease Payments

The future minimum lease payments under non-cancellable operating leases are reflected below. This table also reflects the reconciliation of the undiscounted cash flows to the discounted operating lease liabilities as recognized at March 31, 2019 consolidated balance sheets (in thousands):

	Operating Leases
2019	$	986
2020		1,246
2021		1,216
2022		1,157
2023		622
After 2023		107
Total lease payments	$	5,334
Less: Interest		543
Present value of lease payments	$	4,791

Operating Lease Weighted Average Remaining Lease Term And Discount Rate

The Company has calculated the weighted-average remaining lease term, presented in years below, and the weighted-average discount rate for our operating leases. As noted in our lease accounting policy, the Company uses the incremental borrowing rate as the lease discount rate.

Lease Term and Discount Rate		Three Months Ended March 31, 2019
Weighted-average remaining lease term (years)
Operating leases		4.44
Weighted-average discount rate
Operating leases		5%

Classification of Lease Payments in the Statement of Cash Flows

The table below sets out the classification of lease payments in the consolidated statement of cash flows. The right-of-use assets obtained in exchange for operating lease liabilities represent new operating leases obtained through business combination during the three months ended March 31, 2019.

(in thousands)

Other Information	Three Months Ended March 31, 2019
- Operating cash flows used in operating leases	$	235
Cash paid for amounts included in measurement of liabilities		235

Right-of-use assets obtained in exchange for new operating liabilities	$	1,777