Quarterly report pursuant to Section 13 or 15(d)

Leases

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Leases
3 Months Ended
Oct. 31, 2019
Leases [Abstract]  
Leases

Note 9 – Leases

 

In February 2016, the FASB issued ASU 2016-02, which supersedes previous lease accounting guidance (Topic 840) and establishes a right-of-use model that requires a lessee to record an asset and liability on the balance sheet for all leases with terms longer than 12 months. The Company does not have any material variable payments, residual value guarantees or restrictive covenants for its leases and does not have any leases with terms of 12 months or less.

 

On August 1, 2019, upon adoption of ASC Topic 842, the Company recorded right-of-use assets of approximately $1.4 million, lease liabilities of approximately $2.1 million and a reduction in deferred rent liabilities of $0.6 million for operating leases. Also, the adoption of ASC 842 did not have an impact on the Company’s beginning accumulated deficit balance.

 

The Company has operating leases for corporate offices and lab space. These leases have remaining lease terms of approximately one year to seven years, some of which include options to extend the lease. For any lease where the Company is reasonably certain that a renewal option will be exercised, the lease payments associated with the renewal option period are included in the ROU asset and lease liability as of October 31, 2019.

 

Supplemental balance sheet information related to leases as of October 31, 2019 was as follows:

 

Operating Leases:        
Operating lease right-of-use assets   $ 1,263,272  
         
Current portion included in current liabilities   $ 1,205,825  
Long-term portion included in non-current liabilities     557,534  
Total operating lease liabilities   $ 1,763,359  

 

Supplemental lease expense related to leases was as follows:

 

   

For the Three
Months Ended

October 31, 2019

 
Operating lease cost   $ 212,367  
Total lease expense   $ 212,367  

 

Other information related to leases where the Company is the lessee is as follows:

 

   

For the Three
Months Ended

October 31, 2019

 
Weighted-average remaining lease term     2.9 years  
         
Weighted-average discount rate     8.73%  

 

Supplemental cash flow information related to operating leases was as follows:

 

   

For the Three
Months Ended

October 31, 2019

 
Cash paid for operating lease liabilities   $ 333,011  
Total cash flows related to operating lease liabilities   $ 333,011  

 

Future minimum lease payments under non-cancellable leases as of October 31, 2019 were as follows:

 

Years ending July 31,        
2020   $ 1,079,739  
2021     369,798  
2022     119,708  
2023     120,739  
2024     124,496  
Thereafter     227,176  
Total minimum lease payments     2,041,656  
Less: Imputed interest     (278,297 )
Total   $ 1,763,359  

 

Disclosures related to periods prior to adoption of ASC 842

 

The future minimum obligations under leases in effect as of July 31, 2019 having a noncancelable term in excess of one year as determined prior to the adoption of ASC 842 are as follows:

 

Years ending July 31,        
2020   $ 1,356,000  
2021     308,000  
Total minimum lease payments   $ 1,664,000