Leases

9 Months Ended

Sep. 30, 2021

The Company has operating and finance leases for its corporate offices and other service agreements. Its leases have remaining lease terms of less than one to five years, some of which include options to extend.

In connection with the leases, the Company recognized operating lease right of use assets of $2.0 million and $0.6 million and an aggregate lease liability of $6.7 million and $12.9 million in its condensed consolidated balance sheet as of September 30, 2021 and December 31, 2020, respectively.

On July 13, 2020, the Company announced its decision to transition to an employee-centric model under which employees will work remotely rather than in traditional offices. In connection with this decision, the Company abandoned 14 leases in its global portfolio of office leases during 2020. As a result, the Company recognized accelerated amortization to fully reduce the carrying value of the associated right of use assets between the decision date and the cease use date. During the second quarter of 2021, the Company decided to reoccupy some of its leased space to provide its employees with the option of

working in an office space environment if they choose to do so. There were no changes to the accounting for the lease liabilities associated with the leased office spaces. During the nine months ended 2021, the Company had a $3.5 million gain resulting from the settlement of leases.

As of September 30, 2021, due to a dispute with respect to one of the leases in Israel, the Company was required to pledge cash as collateral security to be maintained at an Israeli bank. The collateral security would remain in control of the bank, to be available in order to satisfy outstanding obligations under the lease contracts. Accordingly, the Company had cash at an Israeli bank of approximately $1.3 million at September 30, 2021, which is recorded as restricted cash in Prepaid expenses and other current assets in the condensed consolidated balance sheets. In the third quarter of 2021, the Company entered into a new lease in Australia and was required to pledge $0.2 million in cash as collateral security.

The Company continues to actively assess its global lease portfolio. However, any additional de-recognition of right of use assets and incurrence of various one-time expenses in connection with early termination of additional leases are not expected to be material to its financial condition or results of operations.

Supplemental cash flow information related to leases for the periods listed are as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	651	$	399	$	1,894	$	4,516
Operating cash flows for finance leases	77		—		256		—
Financing cash flows for finance leases	876		—		2,604		—

The components of lease costs for the periods listed are as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
	(In thousands)
Finance lease cost
Amortization of right of use assets	$	908	$	—	$	2,696	$	—
Interest	77		—		256		—
Operating lease cost	2,324		3,760		5,805		10,524
Total lease cost	$	3,309	$	3,760	$	8,757	$	10,524


	September 30, 2021		September 30, 2020
Weighted Average Remaining Lease Term:
Operating leases	2.7 years		3.5 years
Finance leases	2.1 years		—

Weighted Average Discount Rate:
Operating leases	7	%	7	%
Finance leases	4	%	—	%

Supplemental balance sheet information related to leases was as follows:


	Classification on the Consolidated Balance Sheet	September 30, 2021		December 31, 2020
		(In thousands)
Assets
Operating right of use assets	Operating lease right of use assets	$	1,957	$	614
Finance right of use assets	Property and equipment, net	7,354		10,045

Liabilities
Current liabilities:
Operating lease liability	Operating lease liability	$	3,257	$	5,718
Finance lease liability	Accrued expenses and other current liabilities	3,601		3,488
Non-current liabilities:
Operating lease liability	Operating lease liability, net of current portion	3,415		7,180
Finance lease liability	Other liabilities	3,393		6,176

Future minimum lease payments under non-cancellable operating and finance leases (with an initial or remaining lease terms in excess of one year) are as follows:


	September 30, 2021
	Operating Leases		Finance Leases
	(In thousands)
2021 (remaining three months for September 30, 2021)	$	973	$	954
2022	3,583		3,813
2023	1,433		2,500
2024	524		—
2025	623		—
Thereafter	259		—
Total minimum lease payments	7,395		7,267
Less: present value adjustment	(723)		(273)
Present value of lease liabilities	$	6,672	$	6,994

The timing and amounts of future minimum lease payments under non-cancellable operating leases in the above table may be subject to change as a result of the restructuring. For more information, see Note 14 – Restructuring.