LEASES

The Company adopted the new lease standard on January 1, 2019 using the modified retrospective transition method. Prior periods were not retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods. The Company elected the package of practical expedients permitted under the transition guidance within the new lease standard, which among other things, allowed the Company to continue to account for existing leases based on the historical lease classification. The Company also elected the practical expedients to combine lease and non-lease components for its office leases, which primarily relate to ancillary expenses such as common area maintenance charges and management fees.

The Company determines if an arrangement is a lease at inception by assessing whether it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company’s leases are primarily related to operating leases for its corporate office and subsidiaries, office equipment and cars. The Company's leases have remaining lease terms of less than 1 to 4 years, and sometimes include options to renew. Renewal and termination options are included in the lease term when it is reasonably certain that the Company will exercise the option. However, it has been the Company’s experience to renegotiate a lease and not renew based on the terms of the lease.

ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As all of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate plus some additional considerations for the term of the lease, based on the information available at the lease commencement date, to determine the present value of lease payments. Based on the present value of lease payments for the Company's existing leases, the Company recorded ROU assets and lease liabilities of approximately $3,132,000 upon adoption on January 1, 2019. There was one lease at one of our subsidiaries that was renewed for 2 years effective at January 1, 2019 that is included in the lease liability. The Company had no finance leases.

The impact of the new lease standard on the June 30, 2019 condensed consolidated balance sheet was as follows:

	June 30, 2019
Right-of-use assets	$	2,567,000
Current lease liabilities	$	1,017,000
Noncurrent lease liabilities		1,550,000
Total lease liabilities	$	2,567,000
Weighted average remaining lease term	2.2 years
Weighted average discount rate		7.17	%

Total operating lease costs for the three and six months ended June 30, 2019 were $320,000 and $640,000, respectively, while the total operating lease costs for the three and six months ended June 30, 2018 were $326,000 and $652,000, respectively, which is included in operating costs on the condensed consolidate income statements.

The following table provides supplemental cash flow information related to our operating leases at June 30, 2019:

		Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of operating lease liabilities		$	656,000

The following table shows the future maturities of lease liabilities for leases in effect as of June 30, 2019:

	Lease Liabilities
2019 (excluding the six months ended June 30, 2019)	$	640,000
2020		1,049,000
2021		837,000
2022		452,000
2023		1,000
Total lease payments		2,979,000
Less: imputed interest		(412,000	)
Total	$	2,567,000