Leases

12 Months Ended

Dec. 31, 2022

The Company has operating and finance leases for its corporate offices and other service agreements. Our leases have remaining lease terms of less than one to four years, some of which include options to extend. For leases with a lease term greater than 12 months, right-of-use assets (“ROU assets”) and lease liabilities are recognized on the consolidated balance sheets at the commencement date based on the present value of the remaining fixed lease payments and includes only payments that are fixed and determinable at the time of commencement.

In connection with the leases, the Company recognized operating lease right-of-use assets of $1.6 million and $2.0 million and an aggregate lease liability of $2.8 million and $6.1 million as of December 31, 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 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. There were no changes to the accounting for the lease liabilities associated with the leased office spaces. During 2022, the Company had a $0.2 million gain resulting from the settlement of leases, compared to a $3.5 million gain for 2021.

As of December 31, 2022, due to a dispute in connection with 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 December 31, 2022 and approximately $1.5 million at December 31, 2021, which is recorded as restricted cash in Prepaid expenses and other current assets in the 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 consolidated balance sheets as of December 31, 2022 and 2021.

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:


	Year Ended December 31,
	2022		2021		2020

	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	4,885	$	2,927	$	4,901
Operating cash flows for finance leases	196		362		88
Financing cash flows for finance leases	3,734		3,554		1,154

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


	Year Ended December 31,
	2022		2021		2020

	(In thousands)
Finance lease cost
Amortization of right-of-use assets	$	3,690	$	3,718	$	772
Interest	196		362		88
Operating lease cost	11,332		8,912		12,649
Total lease cost	$	15,218	$	12,992	$	13,509


	December 31, 2022		December 31, 2021
Weighted Average Remaining Lease Term:
Operating leases	1.5 years		2.5 years
Finance leases	1.1 years		2.0 years

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

Supplemental balance sheet information related to leases is as follows:


	Classification on the Consolidated Balance Sheet	December 31, 2022		December 31, 2021

		(In thousands)
Assets
Operating ROU assets	Operating lease ROU assets	$	1,604	$	1,977
Finance ROU assets	Property and equipment, net	3,083		6,797

Liabilities
Current liabilities:
Operating lease liability	Operating lease liability	$	2,160	$	3,380
Finance lease liability	Accrued expenses and other current liabilities	2,569		3,738
Non-current liabilities:
Operating lease liability	Operating lease liability, net of current portion	682		2,733
Finance lease liability	Other liabilities	191		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:


	December 31, 2022
	Operating Leases		Finance Leases

Year Ending December 31,	(In thousands)
2023	$	2,320	$	2,615
2024	346		115
2025	330		86
2026	137		—
2027	—		—
Thereafter	—		—
Total minimum lease payments	3,133		2,816
Less: present value adjustment	(291)		(56)
Present value of lease liabilities	$	2,842	$	2,760

Rental expense for operating leases and other service agreements was approximately $15.2 million, $13.0 million and $13.5 million for the years ended December 31, 2022, 2021, and 2020, respectively.