Leases (Tables)

9 Months Ended

Sep. 30, 2020

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

The following table summarizes the classification of operating ROU assets and lease liabilities on the consolidated balance sheets (in thousands):

		As of
Operating Leases	Classification	September 30, 2020		December 31, 2019

Leased Assets
Operating lease - right of use assets	Long term assets	$	1,726	$	2,215

Lease Liabilities
Operating lease liabilities - current	Other current liabilities		1,141		1,153
Operating lease liabilities	Long term liabilities		2,100		3,000
		$	3,241	$	4,153

Lease Income and Expenses

The table below summarizes lease income and expense recorded in the consolidated statements of operations incurred during the nine months ended September 30, 2020 and 2019, (in thousands):

		Three months ended						Nine months ended
Lease Cost	Classification	September 30, 2020			September 30, 2019			September 30, 2020			September 30, 2019

Operating lease cost ⁽¹⁾	Selling, general and administrative expenses	$	207		$	307		$	625		$	852
Short-term leases costs ⁽²⁾	Selling, general and administrative expenses		-			46			1			119
Sublease income⁽³⁾	Selling, general and administrative expenses		(33	)		(43	)		(97	)		(75	)
Net lease cost		$	174		$	310		$	529		$	896

⁽¹⁾ Includes variable lease costs which are immaterial.

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

⁽³⁾Sublease portfolio consists of two tenants, which sublease parts 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 September 30, 2020 in our consolidated balance sheet (in thousands):

	Operating Leases
2020	$	319
2021		1,255
2022		1,166
2023		631
2024		116
and thereafter		-
Total lease payments	$	3,487
Less: Interest		246
Present value of lease payments	$	3,241

Operating Lease Weighted Average Remaining Lease Term And Discount Rate

We 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, we use the incremental borrowing rate as the lease discount rate.

Lease Term and Discount Rate	September 30, 2020	December 31, 2019
Weighted-average remaining lease term (years)
Operating leases	2.83	3.51
Weighted-average discount rate
Operating leases	5.00%	5.00%

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.

(in thousands)	Nine months ended
Cash paid for amounts included in measurement of liabilities	September 30, 2020		September 30, 2019

Operating cash flows used in operating leases	$	1,015	$	893

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