• Filing Date: 2019-11-15
  • Form Type: 10-Q/A
  • Description: Quarterly report (Amendment)
v3.19.3
OPERATING LEASES
9 Months Ended
Sep. 30, 2019
Leases [Abstract]  
OPERATING LEASES

The Company leases facilities for office space in various locations throughout the United States. The office leases have remaining lease terms of one to five years, some of which include options to terminate within one year.

 

Effective January 1, 2019, the Company adopted Topic 842, as amended, which requires lessees to recognize a ROU asset and lease liability on the balance sheet for most lease arrangements and expands disclosures about leasing arrangements for both lessees and lessors, among other items. The Company adopted ASU 2016-02 using the optional transition method whereby the Company applied the new lease requirements under ASU 2016-02 through a cumulative-effect adjustment, which after completing its implementation analysis, resulted in no adjustment to the Company’s January 1, 2019 beginning retained earnings balance. On January 1, 2019, the Company recognized $921,000 of ROU operating lease assets and $951,000 of operating lease liabilities, including noncurrent operating lease liabilities of $728,000 as a result of adopting this standard. The difference between ROU operating lease assets and operating lease liabilities was primarily due to previously accrued rent expense relating to periods prior to January 1, 2019. As part of adopting ASU 2016-02, the Company elected several practical expedients as discussed in Note 2. The comparative periods have not been restated for the adoption of ASU 2016-02.

 

Operating lease expense from continuing operations for the three months ended September 30, 2019 and 2018 was $85,000 and $180,000, and for the nine months ended September 30, 2019 and 2018 was $268,000 and $516,000, respectively, and is part of general and administrative expenses in the accompanying condensed consolidated statement of operations.

 

Cash paid for amounts included in the measurement of operating lease liabilities from continuing operations was $48,000 and $56,000 for the three and nine months ended September 30, 2019, respectively.

 

During the third quarter of 2019 the Company performed an assessment and determined that one of its operating leases met the criteria to be classified as a lease abandonment. For the three and nine months ended September 30, 2019 the Company recognized $70,000 of expense related to the loss of lease abandonment which is included in other expenses in the condensed consolidated statement of operations.

 

On May 9, 2019, the Company entered into a sublease agreement to lease office space in Columbia, Maryland expiring on August 31, 2021. The Company recognized $291,000 of ROU operating lease assets and $291,000 of operating lease liabilities, including noncurrent operating lease liabilities of $232,000.

 

Supplemental balance sheet information related to leases as of September 30, 2019 was as follows (dollars in thousands): 

  

Operating lease right-of-use lease assets from continuing operations   $ 761  
Operating lease right-of-use lease assets from operations held for sale     154  
Total operating lease right-of-use assets   $ 915  
         
Lease liability, short-term   $ 296  
Lease liability, long-term     673  
Lease liability from operations held for sale     169  
  Total operating lease liabilities   $ 1,138  
         
Weighted average remaining lease term - operating leases from continuing operations     3.8  
         
Weighted average discount rate - operating leases     9 %

 

Maturities of lease liabilities were as follows (dollars in thousands):

 

2019 (October to December)   $ 156  
2020     451  
2021     319  
2022     158  
2023     159  
2024     81  
Total lease payments     1,324  
Less imputed interest     186  
Maturities of lease liabilities   $ 1,138