Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.19.3
Leases
9 Months Ended
Sep. 30, 2019
Leases [Abstract]  
Leases

8.  Leases



The Company adopted ASU 2016-02 on January 1, 2019.  Upon adoption, leases classified as operating leases under previous U.S. GAAP are recognized as right of use lease assets and lease liabilities.  The classification criteria for distinguishing between finance leases and operating leases pursuant to ASU 2016-02 are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance.  Upon adoption, the Company did not have any finance leases, and the Company’s operating leases were as follows:



Office Space Lease



The Company leases 5,466 square feet of office space in Rockville, Maryland, with a lease term ending June 30, 2024.  Prior to the amendment of this lease on March 18, 2019, the lease covered 7,193 square feet and had a lease term ending June 30, 2019.  Under the lease agreement, the Company pays its allocable portion of real estate taxes and common area operating charges.  The lease has escalating rent payments for which the Company records lease expense on a straight-line basis over the lease term, and an option to terminate the leased premises, without penalty, on June 30, 2021.  The Company is reasonably certain that it will not remain in these leased premises after the optional termination date, and therefore, is using the optional termination date in assessing the lease term.



Laboratory Lease



The Company previously leased 2,552 square feet of laboratory space with a lease term due to end on June 30, 2020.  The Company terminated its laboratory lease agreement on February 4, 2019 and surrendered the premises on February 28, 2019. 



The following table summarizes the right of use lease assets and lease liabilities as of September 30, 2019:







 

 

 

Right-of-Use Assets

 

$

233,936 



 

 

 

Operating Lease Liabilities

 

 

 

    Current

 

$

135,052 

    Long Term

 

 

100,397 

Total Operating Lease Liabilities

 

$

235,449 



Lease expense for the three months ended September 30, 2019 was $39,626, which includes $36,770 in operating lease costs and $2,856 in variable lease costs.  Lease expense for the nine months ended September 30, 2019 was $189,705, which includes $164,178 in operating lease costs and $25,527 in variable lease costs.    The right-of-use asset and lease liability were calculated using an estimated incremental borrowing rate of 11%.  At September 30, 2019, the weighted average lease term was 1.8 years.

The table below summarizes the Company’s scheduled future minimum lease payments recorded on the balance sheet, as of September 30, 2019:







 

 

Year Ending December 31:

 

 

2019 (excluding the nine months ended September 30, 2019)

$

25,508 

2020

 

154,961 

2021

 

78,437 

     Minimum lease payments

 

258,906 

Less: Imputed interest

 

(23,457)

     Present value of minimum lease payments

 

235,449 

Less: current maturities of lease obligations

 

(135,052)

     Long-term lease obligations

$

100,397