Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.19.2
Leases
6 Months Ended
Jun. 30, 2019
Leases [Abstract]  
Leases

5. Leases

 

The Company has one operating lease pertaining to 17,698 square feet of corporate office space in Newark, California pursuant to a lease agreement which commenced January 16, 2014 and was amended on April 16, 2018. At June 30, 2019 the Company’s lease portfolio had a weighted average remaining term of 4.6 years, with an option to extend for an additional 5 years. The lease requires monthly lease payments that are subject to annual increases throughout the lease term. The optional period has not been considered in the determination of the right-of-use assets or lease liabilities associated with this lease as the Company did not consider it reasonably certain it would exercise the option.

 

The Company cannot determine the implicit rate in its lease, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used an incremental borrowing rate as of the date of adoption for leases that commenced prior to January 1, 2019. The weighted average discount rate for the Company’s lease portfolio at June 30, 2019 was 12.6%.

 

For the three and six months ended June 30, 2019, the Company incurred $0.1 million and $0.2 million of lease costs included in operating expenses in the condensed consolidated statements of income and comprehensive income in relation to its operating lease, a portion of which was variable rent expense and not included within the measurement of the Company’s operating ROU assets and lease liabilities. The variable rent expense consists primarily of the Company’s proportionate share of operating expenses, property taxes, and insurance and is classified as lease expense due to the Company’s election to not separate lease and non-lease components. Short-term lease costs were not material. At June 30, 2019, the Company’s operating lease right-of-use asset totaled $0.2 million, and the operating lease liability totaled $2.3 million. The short term portion of the operating lease liability was $0.3 million and is contained within other accrued liabilities on the balance sheet, with the remaining $2.0 million liability reported on the balance sheet as long-term portion of operating lease liability

 

Rent expense for the three and six months ended June 30, 2018 was $0.1 million and $0.2 million, respectively, a portion of which represents immaterial variable rent expense.

As of June 30, 2019, the maturities of the Company’s operating lease liabilities were as follows (in thousands):

 

 

 

 

 

 

Operating

 

 

 

 

 

 

Leases

 

Year ending December 31,

 

 

 

 

 

 

 

2019 (from July to December)

 

 

 

 

$

315

 

2020

 

 

 

 

 

647

 

2021

 

 

 

 

 

667

 

2022

 

 

 

 

 

686

 

2023

 

 

 

 

 

707

 

Thereafter

 

 

 

 

 

30

 

Total undiscounted future minimum lease payments

 

 

 

 

$

3,052

 

Less: Imputed interest

 

 

 

 

 

725

 

Total operating lease liability

 

 

 

 

$

2,327

 

Less: Current portion of operating lease

   liability (included in other accrued liabilities)

 

 

 

 

 

373

 

Long-term portion of operating lease liability

 

 

 

 

$

1,954