Leases

6 Months Ended

Jun. 30, 2022

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 four years, some of which include options to extend.

In connection with the leases, the Company recognized operating lease right of use assets of $3.1 million and $2.0 million and an aggregate lease liability of $5.3 million and $6.1 million in its condensed consolidated balance sheet as of June 30, 2022 and December 31, 2021, respectively.

On July 13, 2020, the Company announced its decision to transition to an employee-centric model under which employees 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 three months ended June 30, 2021, the Company had a $3.3 million gain resulting from the settlement of leases.

As of June 30, 2022, 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 $0.2 million at June 30, 2022, 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, which is also recorded as restricted cash in Prepaid expenses and other current assets in the condensed consolidated balance sheets.

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				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	1,264	$	856	$	2,383	$	1,243
Operating cash flows for finance leases	54		85		118		179
Financing cash flows for finance leases	929		869		1,849		1,728

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(In thousands)
Finance lease cost
Amortization of right of use assets	$	921	$	900	$	1,833	$	1,788
Interest	54		85		118		179
Operating lease cost	1,408		1,624		4,410		3,481
Total lease cost	$	2,383	$	2,609	$	6,361	$	5,448


	June 30, 2022		June 30, 2021
Weighted Average Remaining Lease Term:
Operating leases	2.0 years		3.0 years
Finance leases	1.5 years		2.3 years

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

Supplemental balance sheet information related to leases was as follows:


	Classification on the Condensed Consolidated Balance Sheet	June 30, 2022		December 31, 2021
		(In thousands)
Assets
Operating right of use assets	Operating lease right of use assets	$	3,064	$	1,977
Finance right of use assets	Property and equipment, net	4,948		6,797

Liabilities
Current liabilities:
Operating lease liability	Operating lease liability	$	4,100	$	3,380
Finance lease liability	Accrued expenses and other current liabilities	3,813		3,738
Non-current liabilities:
Operating lease liability	Operating lease liability, net of current portion	1,167		2,733
Finance lease liability	Other liabilities	837		2,780

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


	June 30, 2022
	Operating Leases		Finance Leases
	(In thousands)
2022 (remaining six months for June 30, 2022)	$	2,554	$	1,965
2023	2,320		2,617
2024	291		117
2025	332		88
2026	138		—
Total minimum lease payments	5,635		4,787
Less: present value adjustment	(378)		(137)
Present value of lease liabilities	$	5,257	$	4,650