LEASES

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

LEASES

LEASESWe lease our office space under lease arrangements with expiration dates on or before March 31, 2024. We recognize lease expense on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Balance Sheets. We combine lease and non-lease components for new and reassessed leases. We apply discount rates to operating leases using a portfolio approach.

Below is a summary of our ROU assets and lease liabilities (in thousands):

	Balance Sheets Classification	March 31, 2022		December 31, 2021
Assets
Right-of-use assets	Other assets	$	861	$	912
Liabilities
Operating lease liabilities - current	Other current liabilities	1,065		1,098
Operating lease liabilities - long-term	Other long-term liabilities	360		550
Total lease liabilities		$	1,425	$	1,648

The table below provides supplemental information related to operating leases during the three months ended March 31, 2022 and 2021 (in thousands except for lease term):

	Three Months Ended March 31,
	2022			2021
Cash paid within operating cash flow	$	355		$	367
Weighted average lease terms (in years)	1.11			2.20
Weighted average discount rates	3.93		%	N/A

On January 31, 2022, we entered into an agreement to lease for a 1,390 square feet of office space in Aventura, Florida (“Aventura Lease”). We plan to use this facility for administrative functions. This lease commenced in the first quarter of 2022 and expires in the first quarter of 2024. We accounted for this lease as an operating lease in accordance with the provisions of ASC 842 Leases (“ASC 842”). In the first quarter of 2022, we recorded a lease liability of $0.1 million, which represents the present value of the lease payments using an estimated incremental borrowing rate of 3.93%. We also recognized right-to-use asset ("ROU") of $0.1 million which represents our right to use an underlying asset for the lease term.

On March 12, 2020, we entered into a sublease agreement with Neato Robotics, Inc. (“Neato”) for the SJ Facility. This sublease commenced in June 2020 and ends on April 30, 2023 which is the lease termination date of the original SJ Facility lease. In accordance with provisions of ASC 842, we treated the sublease as a separate lease as we were not relieved of the primary obligation under the original lease. We continue to account for the original SJ Facility, as a lessee, in the same manner as prior to the commencement date of the sublease. We accounted for the sublease as a lessor of the lease. We classified the sublease as an operating lease as it did not meet the criteria of a Sale-Type or Direct Financing lease.

At the commencement date of the sublease, we recognized initial direct costs of $0.3 million. These deferred costs will be amortized over the term of the sublease payments. As of March 31, 2022, unamortized balance of the deferred costs are not material.

We recognize operating lease expense and lease payments from the sublease, on a straight-line basis, in our Condensed Consolidated Statements of Income and Comprehensive Income over the lease terms. During the three months ended March 31, 2022 and 2021, our net operating lease expenses are as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
Operating lease cost	$	210	$	215
Sublease income	(257)		(257)
Total lease cost	$	(47)	$	(42)

Minimum future lease payments obligations as of March 31, 2022 are as follows (in thousands):

For the Years Ending December 31,
2022	$	914
2023	521
2024	40
Total	$	1,475

Future lease payments from our sublease agreement as of March 31, 2022 are as follows (in thousands):

For the Years Ending December 31,
2022	$	812
2023	351
Total	$	1,163