Leases

12 Months Ended

Dec. 31, 2021

Operating Leases

During the second quarter of 2021, the Company amended its existing lease in Los Angeles, California. In accordance with Accounting Standards Codification (ASC) 842, the amended lease agreement is considered to be modified and subject to lease modification guidance. The right-of-use (ROU) asset and lease liability related to the agreement were remeasured based on the change in the lease conditions such as rent payment and lease terms. The fair value of the increase in related lease liability and ROU asset is estimated to be approximately $2.2 million. The amended lease now extends through March 31, 2027 and provides one option to extend for an additional five years.

During the fourth quarter of 2021, the Company entered into a new lease agreement to lease office space in Tustin, California. The Tustin office space will replace the Company’s current office space located in Irvine, California. The lease extends through June 30, 2028, providing one option to extend for an additional five years. The fair value of the increase in related lease liability and ROU asset is estimated to be approximately $1.4 million.

As of December 31, 2021 and 2020, the Company had ROU assets of $4.4 million and $1.2 million, respectively, and corresponding operating lease liabilities of $4.7 million and $1.6 million, respectively.

The components of operating lease expense for the periods indicated are as follows:


	Year Ended December 31,
(In thousands)	2021		2020
Operating leases
Operating lease expense	$	625	$	501
Variable lease expense	195		182
Operating lease expense	820		683
Short-term lease rent expense	249		253
Total expense	$	1,069	$	936

As of December 31, 2021, the weighted average remaining lease term for operating leases is 5.2 years and the weighted average discount rate used to determine the operating lease liabilities is 5.9%.

Future minimum lease payments under operating leases as of December 31, 2021 are as follows:


(In thousands)
Year	Amount
2022	$	694
2023	949
2024	1,159
2025	1,141
2026	906
Thereafter	677
Total	5,526
Less: Present value discount	(844)
Present value of total operating lease liabilities	4,682
Less: Current portion	(528)
Long-term obligations under operating leases	$	4,154