4. LEASES

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

LEASES

On January 1, 2019, the Company adopted Topic 842, which is intended to improve financial reporting about leasing transactions. Under the standard, organizations that lease assets, referred to as “Lessees” shall recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. In addition, the standard requires disclosures including financial statements to assess the amount, timing and uncertainty of cash flows arising from leases.

The Company elected to use the practical expedients permitted under the transition guidance within the new standard, which among other things, allows the Company to carryforward the historical lease classifications. The Company made an accounting policy election to account for leases with an initial term of 12 months or less similar to existing guidance for operating leases today. The Company recognized those lease payments in the Consolidated Statement of Operations on a straight-line basis over the lease term. In June 2014, the Company entered into an amendment with its landlord and renewed its lease through 2018. In October 2016, the Company entered into an amendment reducing the square footage being leased for the remaining term of the lease. The lease expired in October 2018 and the Company is currently on a month to month lease with the landlord as it negotiates a new long term lease and as such the Company has accounted for it as a practical expedient in fiscal and accounted for it as an operating lease. As of December 31, 2019, the Company reevaluated the lease under the guidance of Topic 842 and estimated an expected term of one year for analysis under Topic 842. Under the new standard, the Company’s lease liability is based on the present value of such payments and the related right-of-use asset will generally be based on the lease liability.

The impact of the adoption of Topic 842 on the accompanying consolidated balance sheet as of December 31, 2019, is as follows (in thousands):

	December 31, 2019		Adjustments Due to the Adoption of Topic 842				December 31, 2019
			Right-of-use asset		Lease liability
Property and equipment, net	$	6	$	63		--	$	69
Current liabilities	$	17		--	$	63	$	80

	December 31, 2019
Lease term and discount rate
Weighted-average remaining lease term operating lease		1.0 year
Weighted-average discount rate operating lease		10.0	%

Components of lease assets and liabilities

	December 31, 2019
Assets
Property and equipment, net operating lease-right of use asset	$	63
Liabilities
Current liabilities operating lease-current liability	$	63