RIGHT-OF-USE ASSETS |
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| RIGHT-OF-USE ASSETS |
NOTE 3 — RIGHT-OF-USE ASSETS As discussed in Note 1, the Company adopted ASU 2016-02, Leases (Topic 842) effective July 1, 2019. As of July 1, 2019, the Company had two leases in effect, consisting of (i) a lease for its headquarters location in Redwood City, California that was entered into on January 25, 2019, that provides for monthly rent of approximately $21,000 through the expiration date in March 2022, and (ii) a lease for office space in Bend, Oregon entered into on February 7, 2019, that provides for monthly rent of approximately $2,700 through the expiration date in February 2021. The impact of adoption of ASU 2016-02 resulted in the recognition of right-of-use ("ROU") assets for $0.6 million and operating lease liabilities for the discounted present value of the future lease payments on these leases of approximately $0.6 million. For the three months ended September 30, 2019, the Company had operating lease expense of approximately $68,000 under ASC 842. For the three months ended September 30, 2018, the Company had operating lease expense of approximately $152,000 under the previous lease accounting standard. The Company determined the operating lease liability of approximately $633,000 based upon a discount rate of 10.0% and assuming that the Company will not exercise its option to extend the lease for an additional three years. The discount rate represents the Company’s estimated incremental borrowing rate for collateralized debt with a payment structure and term similar to the underlying operating lease terms. Balance Sheet Presentation As of September 30, 2019 and on the adoption date of July 1, 2019, the carrying value of ROU assets and operating lease liabilities are as follows (in thousands):
As of September 30, 2019, the weighted average remaining lease term under operating leases was 2.3 years and the weighted average discount rate for operating lease liabilities was 10.0%. Future Lease Payments Future payments under operating lease agreements as of September 30, 2019 are as follows (in thousands):
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