Note 5 – Leases

The Company leases an office in Fort Lauderdale, Florida under an operating lease. The term expires November 2024. The annual base rent is subject to annual increases of 2.75%.

The Company leases an office in Israel under an operating lease that was scheduled to expire on December 31, 2019. On July 4, 2019, the Company exercised its option to extend the lease expiration to December 31, 2022. The right-of-use asset and lease liability were adjusted to include the renewal period in the amount of $176. The base rent is subject to a 4% increase beginning on January 1, 2020.

The Company leases vehicles under operating leases that expire at various dates through 2022.

Many of these leases provide for payment by the Company, as the lessee, of taxes, insurance premiums, costs of maintenance and other costs which are expenses as incurred. Certain operating leases include escalation clauses and some may include options to extend the leases for up to 3 years.

Operating cash flow supplemental information for the year ended December 31, 2019:

An initial right-of-use asset of $1,065 was recognized as a non-cash asset and operating lease liabilities of $1,074 was recognized as a non-cash liability addition with the adoption of the new lease standard. An initial right-of-use asset and operating lease liability in the amount of $176 was recognized as a non-cash asset and liability upon the exercise of its option to extend the Israel lease. Cash paid for amounts included in the present value of operating lease liabilities was $347 during the year ended December 31, 2019.

Other information:

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

Future minimum lease payments under non-cancellable operating leases as of December 31, 2018 were as follows:

The Company records operating lease payments to lease expense using the straight-line method. The Company’s variable lease cost was $99 for the year ended December 31, 2019. The Company’s lease expense was $397 and $526 for the years ended December 31, 2019 and 2018, respectively, included in general and administrative expenses and net of $18 of the Company’s related party receivable (see Note 8).