Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.20.1
Leases
3 Months Ended
Mar. 31, 2020
Leases  
Leases

13. Leases

Effective January 1, 2019, the Company adopted ASC 842 using the optional transition method, applying no practical expedients. In accordance with the optional transition method, the Company did not recast the prior period consolidated financial statements. The lease term is the noncancelable period of the lease. There are no termination provisions or renewal periods reasonably certain of exercise or options controlled by the lessor.

 

The Company conducts its operations from leased facilities in Morrisville, North Carolina, and San Antonio, Texas, the leases for which will expire in 2027 and 2023. The leases are for general office space and require the Company to pay property taxes, insurance, common area expenses and maintenance costs.

 

On October 1, 2019, the commencement date of our Morrisville, North Carolina lease, a right-of-use asset of $2.0 million and a liability of $1.4 million were recorded on our balance sheet. Total cash paid for operating leases during the three months ended March 31, 2020 was $0.08 million and is included within cash flows from operating activities within the consolidated statement of cash flows.

 

The Company leases furniture and specialized lab equipment under finance leases. The related right-of-use assets are amortized on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset. The effective interest rate is 6.2%.

 

The Company’s lease cost is reflected in the accompanying statements of operations and comprehensive loss as follows:

 

 

 

 

 

 

 

For the Three Months Ended March 31, 2020

Operating lease cost

 

$

103,956

Finance lease cost

 

 

 

Amortization of lease assets

 

 

25,027

Interest on lease liabilities

 

 

4,412

Total finance lease cost

 

$

29,439

 

The weighted average remaining lease term and incremental borrowing rate as of March 31, 2020 were as follows:

 

 

 

 

 

 

Weighted average remaining lease term

 

 

 

 

Operating leases

 

 

7 years

 

Finance leases

 

 

3 years

 

Weighted average discount rate

 

 

 

 

Operating leases

 

 

6.56

%

Finance leases

 

 

6.17

%

 

Maturities of operating and finance lease liabilities as of March 31, 2020 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Leases

    

Finance Leases

    

Total

2020 (excluding the three months ended March 31, 2020)

 

$

241,661

 

$

90,513

 

$

332,174

2021

 

 

330,032

 

 

120,684

 

 

450,716

2022

 

 

338,960

 

 

155,694

 

 

494,654

2023

 

 

244,973

 

 

10,284

 

 

255,257

2024

 

 

231,503

 

 

 -

 

 

231,503

2025

 

 

238,452

 

 

 -

 

 

238,452

Thereafter

 

 

454,821

 

 

 -

 

 

454,821

Total minimum lease payments

 

 

2,080,402

 

 

377,175

 

 

2,457,577

Less: imputed interest

 

 

(395,645)

 

 

(31,968)

 

 

(427,613)

Present value of lease liabilities

 

$

1,684,757

 

$

345,207

 

$

2,029,964

 

 

Maturities of operating lease liabilities as of March 31, 2019 were as follows:

 

 

 

 

 

2019 (excluding the three months ended March 31, 2020)

 

$

166,238

2020

 

 

115,580

2021

 

 

118,158

2022

 

 

120,737

2023

 

 

20,195

Total lease payments

 

 

540,908

Less: imputed interest

 

 

(69,769)

Present value of operating lease liabilities

 

$

471,139

 

 

 

 

 

 

 

.