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Commitment and Contingencies
 12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
The Company determines if an arrangement is a lease, or contains a lease, at the inception of the arrangement and evaluates whether the lease is an operating lease or a finance lease at the commencement date. The Company recognizes ROU lease assets and lease liabilities for operating and finance leases with initial terms greater than 12 months. Lease liabilities are calculated as the present value of fixed payments not yet paid at the measurement date and variable lease payments which are not based on an index or a rate, such as common area maintenance fees, taxes and insurance, are expensed as incurred. ROU assets represent the Company’s right to use an asset for the lease term, while lease liabilities represent the Company’s obligation to make lease payments. The ROU assets for operating and finance leases and liabilities are recognized based on the present value of fixed lease payments over the lease term at the lease commencement date. Since the interest rate implicit in the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate, which is estimated as the interest rate paid to borrow on a collateralized basis over a similar term, to determine the present value of lease payments.
Operating lease ROU assets are recognized net of any lease prepayments and incentives. Operating lease expense is recognized on a straight-line basis over the lease term.
The Company has one real estate lease associated with its corporate headquarters which commenced on September 1, 2020. The lease agreement provides a 60 month lease term extension option which the Company is not reasonably certain to exercise as of December 31, 2021. The lease agreement has lease and non-lease components that are accounted for as a single lease component.
For the years ended December 31, 2021 and 2020, the Company recorded the following lease expenses:
Year Ended December 31,
20212020
(in thousands)
Operating lease expense$953 $640 
Variable lease payment455 289 
Total lease expense$1,408 $929 
Additional information related to the operating lease for the period the Company adopted ASC 842 is as follows:
Year Ended December 31,
20212020
(in thousands)
Operating cash outflows from operating leases$774 $828 
Operating lease ROU assets obtained in exchange for new lease liabilities— 5,362 
Weighted-average remaining lease term – operating lease (in years) 7.088.08
Weighted-average discount rate – operating lease7.72 %7.72 %
The balance of the Company’s operating lease ROU asset and operating lease liability is summarized below. The current and non-current lease liabilities are reflected in other current liabilities and non-current operating lease liabilities, respectively, on the Company’s consolidated balance sheets:
December 31, 2021
December 31, 2020
(in thousands)
Operating lease right-of-use asset$5,911 $5,911 
Accumulated amortization(722)(178)
Operating lease right-of-use assets, net$5,189 $5,733 
Current operating lease liability$495 $364 
Non-current operating lease liability4,643 5,138 
Total operating lease liability$5,138 $5,502 
The maturity of the Company’s lease liability is as follows:
At December 31, 2021
(in thousands)
2022$869 
2023894 
2024920 
2025945 
2026970 
Thereafter2,103 
Total undiscounted liabilities6,701 
Less: Interest1,563 
Present value of lease liabilities$5,138 
Contingencies
As of December 31, 2021, the Company is not involved in any claim, proceeding or litigation which may be deemed to have a material adverse effect on the Company’s consolidated financial statements taken as a whole.