Leases

9 Months Ended

Sep. 30, 2021

The Company has operating leases for administrative offices in the United States (California), Canada, India, United Kingdom and Germany.

The Company terminated the lease in Ratingen, Germany in January 2021. The Company entered into two new operating leases for its administrative offices in Ratingen, Germany, both from February 1, 2021 through January 1, 2023. The monthly lease rate is 2,510 EUR and 1,010 EUR per month.

The Company has no other operating or financing leases with terms greater than 12 months.

Right-of-use assets are summarized below (in thousands):


	As of September 30, 2021
Palo Alto, CA Office	$	631
Hyderabad, India Office	360
Coquitlam, Canada Office	96
Westminster, Canada Office	10
Toronto, Canada Office	950
Ratingen, Germany Office	92
Berlin, Germany Office	549
Slough, United Kingdom Office	34
Less accumulated amortization	(1,135)
Right-of-use asset, net	$	1,587

Lease expense for operating leases recorded in the balance sheet is included in operating costs and expenses and is based on the future minimum lease payments recognized on a straight-line basis over the term of the lease plus any variable lease costs. Operating lease expenses, inclusive of short-term and variable lease expenses, recognized in our consolidated statement of income for the three months ended September 30, 2021 was $0.3 million and $0.8 million for the nine months ended September 30, 2021.

During the three-month period ended September 30, 2021, the Company recorded approximately $0.2 million as rent expense to the right-of-use assets. During the nine-month period ended September 30, 2021, the Company recorded approximately $0.6 million as rent expense to the right-of-use assets.

Lease liability is summarized below (in thousands):


	As of September 30, 2021
Total lease liability	$	1,617
Less: short term portion	(587)
Long term portion	$	1,030

Maturity analysis under the lease agreement is as follows (in thousands):


Year ending December 31, 2021	$	167
Year ending December 31, 2022	649
Year ending December 31, 2023	356
Year ending December 31, 2024	263
Year ending December 31, 2025	251
Year ending December 31, 2026	104
Total	$	1,790
Less: Present value discount	(173)
Lease liability	$	1,617

Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the date of adoption of ASC 842, Leases ("ASC 842"). As of September 30, 2021, the weighted average remaining lease term is 3.56 and the weighted average discount rate used to determine the operating lease liabilities was 8.0%.