Leases (Tables)

12 Months Ended

Dec. 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	December 31, 2019
Leased Assets
Operating lease - right of use assets	Long term assets	$	2,215

Lease Liabilities
Operating lease liabilities - Current	Other current liabilities		1,153
Operating lease liabilities	Long term liabilities		3,000
		$	4,153

Lease Income and Expenses

The table below summarizes the lease income and expenses recorded in the consolidated statements of operations incurred year to date ended December 31, 2019 , (in thousands):

Lease Cost	Classification	Twelve months ended December 31, 2019
Operating lease cost ⁽¹⁾	Selling, general and administrative expenses	$	1,112
Short-term leases costs ⁽²⁾	Selling, general and administrative expenses		121
Sublease income⁽³⁾	Selling, general and administrative expenses		(107	)
Net lease cost		$	1,126

⁽¹⁾ Includes variable lease costs which are immaterial.

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

⁽³⁾Sublease portfolio consists of 2 tenants, which sublease parts of our office located at 1332 Londontown Blvd, Suite 200, Sykesville, MD.

Future Minimum Lease Payments

The Company is obligated under certain noncancelable operating leases for office facilities and equipment. Future minimum lease payments under noncancelable operating leases as of December 31, 2019 are as follows:

(in thousands)	Gross Future
	Minimum Lease
	Payments

2020	$	1,335
2021		1,293
2022		1,184
2023		622
2024		106
Thereafter		-
Total	$	4,540
Less: Interest		387
Present value of lease payments	$	4,153

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		Twelve months ended December 31, 2019
Weighted-average remaining lease term (years)
Operating leases		3.51
Weighted-average discount rate
Operating leases		5.00%

The table below sets out the classification of lease payments in the consolidated statement of cash flows. The ROU assets obtained in exchange for operating lease liabilities represent new operating leases obtained through our business combination during the year to date ended December 31, 2019:

(in thousands)

Other Information	Twelve months ended December 31, 2019
- Operating cash flows used in operating leases	$	1,275
Cash paid for amounts included in measurement of liabilities		1,275

ROU assets obtained in exchange for new operating liabilities	$	1,777