Leases

9 Months Ended

Sep. 30, 2022

Leases

Leases

4. 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 2.01 years.

The table below presents supplemental information related to operating leases:

	Nine Months Ended			Year Ended
	September 30, 2022			December 31, 2021
Operating lease costs during the period (1)	$	727		$	2,718
Cash payments included in the measurement of operating lease liabilities during the period	$	351		$	2,787
Weighted-average remaining lease term (in years) as of period-end		2.01			2.75
Weighted-average discount rate during the period		9.90	%		9.90	%

(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, including maintenance and utilities.

The components of operating lease costs were as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021
Operating lease costs:
Cost of revenue	$	-		$	630	$	-		$	1,261
Selling and marketing		-			181		-			362
General and administrative		328			148		891			297
Total operating lease costs (1)		328			959		891			1,920
Sublease income		(55	)		-		(164	)		-
	$	273		$	959	$	727		$	1,920

(1) Includes certain costs associated with a business membership agreement (see below) that permits access to certain office space for the three and nine months ended September 30, 2022 of $170 and $510, respectively, and month-to-month lease arrangements for the three and nine months ended September 30, 2022 of $95 and $191, respectively.

Maturities of the operating lease liability as of September 30, 2022 are summarized as follows:

Years Ending December 31,
2022 (remaining three months of the year)	$	120
2023		486
2024		373
Minimum lease payments		979
Less imputed interest		(95	)
Present value of operating lease liability	$	884
Current portion of operating lease liability	$	413
Long-term portion of operating lease liability		471
Total operating lease liability	$	884

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 September 30, 2022, the Company is entitled to receive total sublease income of $537.

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 15 months remaining at $57 per month for 110 accounts.