|3 Months Ended|
Mar. 31, 2019
|LEASES [Text Block]||
NOTE 8 – LEASES
As of January 1, 2019, the Company adopted ASU No. 2016-02, “Leases (Topic 842),” which requires leases with durations greater than twelve months to be recognized on the balance sheet. The Company adopted the standard using the modified retrospective approach with an effective date as of the beginning of our fiscal year, January 1, 2019. The total impact of the adoption of this standard at January 1, 2019 was an increase of assets and liabilities in the amount of $3,226 thousand. Prior year financial statements were not recast under the new standard and, therefore, those amounts are not presented below. The Company elected the package of transition provisions available for expired or existing contracts, which allowed us to carryforward our historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs.
The Company leases research and development facilities, equipment, offices and cars under finance and operating leases. For leases with terms greater than 12 months, the Company record the related asset and obligation at the present value of lease payments over the term. Many of the leases include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate.
The Company leases do not provide a readily determinable implicit rate. Therefore, the Company estimated the incremental borrowing rate to discount the lease payments based on information available at lease commencement.
Research and Development facilities
The Company leases space for its CDMO facilities and research and development facilities in Belgium, Israel, South Korea and the United States of America under five lease agreements of operating leases. The leasing contracts are for a period of 3 - 16 years.
The Company leases laboratory equipment in Belgium under several agreements of finance leases. The equipment is the basic material for our new production center (as Incubator, laminar flow and bio-reactor). Each leasing contract is concluded for a period of 5 years.
The Company leases space for offices in Belgium, Korea, Israel and the United States of America under operating leases. The leasing contract are for a period of 1.5 - 16 years. These contracts are considered as operational leasing and under operating lease right-of-use assets.
The Company leases cars. Each leasing contract is concluded for a period of 4 years. These contracts are considered as operational leasing and operating lease right-of-use assets.
The table below presents the lease-related assets and liabilities recorded on the balance sheet.
The table below present certain information related to lease costs and finance and operating leases during the three months ended March 31, 2019.
The table below presents supplemental cash flow information related to leases during the three months ended March 31, 2019:
Undiscounted Cash Flows
The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheet.
Future minimum lease payments as of November 30, 2018
Future minimum lease commitments under non-cancelable operating lease agreements are as follows:
Future minimum lease payments as of December 31, 2018
No material change in the month ended December 31, 2018
Lease facilities in the USA
During January 2019, Masthercell U.S., LLC executed a lease agreement for production facilities in the United States. Under the terms of the agreement, Masthercell U.S., LLC leased approximately 32,011 square feet for 180 months. Masthercell U.S., LLC advanced $1.6 million on account of a security deposit, tenant improvement allowance and prepaid base rent.
The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef