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Leases (Tables)

12 Months Ended

Dec. 31, 2021

Classification of Operating ROU Assets and Lease Liabilities on the Balance Sheet

Lease contracts are evaluated at inception to determine whether they contain a lease and whether we obtain the right to control an identified asset. The following table summarizes the classification of operating ROU assets and lease liabilities on the consolidated balance sheets (in thousands):

Operating Leases	Classification	December 31, 2021		December 31, 2020
Leased Assets
Operating lease - right of use assets	Long term assets	$	1,200	$	1,562

Lease Liabilities
Operating lease liabilities - Current	Other current liabilities		1,205		1,138
Operating lease liabilities	Long term liabilities		790		1,831
		$	1,995	$	2,969

Lease Income and Expenses

The table below summarizes the lease income and expenses recorded in the consolidated statements of operations incurred year to date ended December 31, 2021, (in thousands):

Lease Cost	Classification	Twelve months ended December 31, 2021
Operating lease cost ⁽¹⁾	Selling, general and administrative expenses	$	728
Short-term leases costs ⁽²⁾	Selling, general and administrative expenses		60
Sublease income⁽³⁾	Selling, general and administrative expenses		(115	)
Net lease cost		$	673

⁽¹⁾ Includes variable lease costs which are immaterial.

⁽²⁾ Include leases maturing less than twelve months from the report date.

⁽³⁾Sublease portfolio consists of 2 tenants, which sublease parts of our principal executive office located at 1332 Londontown Blvd, Suite 200, Sykesville, MD.

Future Minimum Lease Payments

We are obligated under certain noncancelable operating leases for office facilities and equipment. Future minimum lease payments under noncancelable operating leases as of December 31, 2021 are as follows:

(in thousands)	Gross Future
	Minimum Lease
	Payments

2022	$	1,280
2023		675
2024		122
2025		10
2026		3
Thereafter		-
Total	$	2,090
Less: Interest		95
Present value of lease payments	$	1,995

Operating Lease Weighted Average Remaining Lease Term And Discount Rate

We have calculated the weighted-average remaining lease term, presented in years below, and the weighted-average discount rate for our operating leases. As noted in our lease accounting policy, we use the incremental borrowing rate as the lease discount rate:

Lease Term and Discount Rate	Twelve months ended December 31, 2021
Weighted-average remaining lease term (years)
Operating leases		1.80
Weighted-average discount rate
Operating leases		5.00	%

Classification of Lease Payments in the Statement of Cash Flows

The table below sets out the classification of lease payments in the consolidated statements of cash flows. There was no right-of-use assets obtained in exchange for operating lease liabilities represent new operating leases obtained through our business combination during the year to date ended December 31, 2021:

(in thousands)

	Twelve months ended December 31,
Cash paid for amounts included in measurement of liabilities	2021		2020

Cash paid for amounts included in measurement of liabilities	$	1,326	$	1,314

Right-of-use assets obtained in exchange for new operating lease liabilities	$	-	$	-