Leases

We adopted ASU

2016

effective

January 1, 2019

and elected the modified retrospective transition method, recording a cumulative-effect adjustment as of that date and presenting comparative prior year periods in accordance with Accounting Standards Codification Topic

840.

On the date of adoption, we recorded a cumulative adjustment to recognize new net lease liabilities of

$1.7

million and new right-of-use (ROU) assets of

$1.2

million, for operating leases on our consolidated balance sheets, based on the present value of remaining rental payments for existing operating leases. As part of adoption, we also de-recognized

$0.5

million in deferred rent. Adoption of the standard did

not

have a material impact on our statement of operations or statement of cash flows. As part of adoption, we elected the short-term lease recognition exemption for our facility rental and equipment leases (all leases that qualified), which means that we did

not

recognize ROU assets or lease liabilities for existing short-term leases (leases of

-months or less) as of the

January 1, 2019

adoption date. In addition, when adopting ASU

2016

we applied the following practical expedients to forego assessing:

	•	whether any expired or existing contracts are or contain a lease,
	•	lease classification for any expired or existing leases, and
	•	initial direct costs for any existing leases.
	•	to separate non-lease components from lease components for leases of real estate assets.

We determine if an arrangement is a lease at inception. On our balance sheet, our office leases are included in ROU assets and related lease liabilities are included in the operating leases and operating leases, long-term statement line items. We determined that we do

not

currently have finance leases.

ROU assets represent our right to use the underlying assets for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease agreements. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the term of the lease. For leases that do

not

provide an implicit rate, we use an incremental borrowing rate based on information available at the commencement date to determine the present value of lease payments. We will use the implicit rate in the lease when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

December 2019,

we entered into an operating lease agreement for a new corporate office facility in Seattle, Washington. The term of the lease is

months, with a rent date starting on

May 1, 2020

and the lease term ending on

July 31, 2027.

As a result of entering into this lease agreement in

December 2019,

we recorded additional ROU assets and net lease liabilities of

$1.2

million on our consolidated balance sheets. There was

material impact to our statement of operations or statement of cash flows as a result of entering into this lease.

November 2020,

we renewed the lease for our office facility in the UK. The term of the lease is

120

months, with rent payments starting on

November 30, 2020

and the lease term ending on

November 8, 2030.

The Company has an opportunity to break the lease at the

five

-year mark in

November 2025.

As it is reasonably certain that we will utilize this option, the accounting for this lease utilized

November 2025

as the end date. The lease commencement date was

November 9, 2020.

As a result of entering this lease agreement, we recorded additional ROU assets and net lease liabilities of

$365,559

on our consolidated balance sheet as of

December 31, 2020.

There was

material impact to our statement of operations or statement of cash flows as a result of entering into this lease.

Our leases have remaining terms of

five

seven

years. The only leases that contain renewal options are for office space leases at our Seattle and Trowbridge locations. In the

fourth

quarter of

2019,

we made the decision to

not

renew our Bellevue lease, which expired at the end of

May 2020,

and we made the decision

not

to renew our Taiwan lease, exiting that facility in

February 2020 (

see Note

17,

“Restructuring Costs”). Because of changes in our business, we are

not

able to determine with reasonable certainty whether we will renew our Seattle lease. As a result, we have

not

considered renewal options when recording ROU assets, lease liabilities or lease expense.

	Twelve months ended
Total component lease expense was as follows (in thousands):	December 31, 2020
Operating leases	$	661
Supplemental cash flow information related to leases was as follows (in thousands):
Cash paid for amounts included in the measurement of lease liabilities	$	668

Supplemental balance sheet information related to leases was as follows (dollars in thousands):	December 31, 2020
Operating leases:
Right of use	$	1,853
Current portion of operating leases liability	$	344
Operating leases liability, net of current portion		1,630
Total operating leases liabilities	$	1,974
Weighted Average Remaining Lease Term (in years)		6.15
Weighted Average Discount Rate		8.5	%

Future operating lease commitments are as follows (in thousands):

As of December 31, 2020, maturities of lease liabilities were as follows:	Operating leases
Years Ended December 31,
2021	$	365
2022		372
2023		378
2024		385
2025		371
Thereafter		439
Total minimum lease payments	$	2,310
Less: amount representing imputed interest		(336	)
Present value of lease liabilities	$	1,974