Leases

3 Months Ended

Mar. 31, 2022

Leases

Leases

3. Leases

The Company’s real estate lease for the use of office space was subleased during the year ended December 31, 2021 (as further described below). The Company’s current lease is a long-term operating lease with a remaining fixed payment term of 2.51 years.

The table below presents supplemental information related to operating leases:

	Three Months Ended March 31,
	2022			2021
Operating lease costs during the period (1)	$	179		$	2,718
Cash payments included in the measurement of operating lease liabilities during the period	$	117		$	2,787
Weighted-average remaining lease term (in years) as of period-end		2.51			11.02
Weighted-average discount rate during the period		9.9	%		13.6	%

(1) Operating lease costs is presented net of sublease income that is not material.

The Company generally utilizes its incremental borrowing rate based on information available at the commencement of the lease in determining the present value of future payments since the implicit rate for the Company’s leases is not readily determinable.

Variable lease expense includes rental increases that are not fixed, such as those based on amounts paid to the lessor based on cost or consumption, such as maintenance and utilities.

The components of operating lease costs were as follows:

	Three Months Ended March 31,
	2022			2021
Operating lease costs:
Cost of revenue	$	-		$	1,797
Selling and marketing		-			516
General and administrative		234			423
Total operating lease costs (1)		234			2,736
Sublease income		(55	)		(18	)
	$	179		$	2,718

(1) Includes certain costs associated with a business membership agreement that permits access to certain office space of $170, see below.

Maturities of the operating lease liability as of March 31, 2022 are summarized as follows:

Years Ending December 31,
2022 (remaining nine months of the year)	$	355
2023		486
2024		373
Minimum lease payments		1,214
Less imputed interest		(144	)
Present value of operating lease liability	$	1,070
Current portion of operating lease liability	$	387
Long-term portion of operating lease liability		683
Total operating lease liability	$	1,070

Sublease Agreement – In November 2021, the Company entered into an agreement to sublease its leased office space for the duration of its operating lease through September 2024. As of March 31, 2022, the Company is entitled to receive sublease income of $582.

Business Membership – Effective October 1, 2021, the Company entered into a business membership agreement with York Factory LLC, doing business as SaksWorks, that permits access to certain office space with furnishings, referred to as SaksWorks Memberships (each membership provides a certain number of accounts that equate to the use of the space granted). The term of the agreement was for 27 months, with 21 months remaining at $57 per month for 110 accounts.