Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

LeasesThe Company determines whether an arrangement is a lease, or contains a lease, at inception and recognizes right-of-use assets and lease liabilities, initially measured at present value of the lease payments, on our balance sheet and classifies the leases

as either operating or financing leases. The Company leases office space in Henderson, Nevada, which lease was entered into with an effective date of March 24, 2022 and serves as the Company's new headquarters, as well as in Santa Monica, California and in Rosemont, Illinois, which are accounted for as operating leases, and various computer equipment used in the operation of our business, which are accounted for as finance leases. The operating lease agreements include a total of 13,166 square feet of office space for lease terms ranging from 26 months to 60 months. The finance leases are generally for 36 month terms. The Company’s operating leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. The operating leases include renewal options and escalation clauses. The renewal options have not been included in the calculation of the operating lease liability and right-of-use asset as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses.

During the fourth quarter of 2021, the Company approved a plan for its headquarter office-based employees to work 100% remotely on a permanent basis and entered into an agreement with a broker to list the entire office space located in Santa Monica, CA for sublease. As a result of this real estate rationalization decision, an impairment analysis of our operating right-of-use asset resulted in an impairment charge of $0.9 million to reduce the carrying value of this asset to its estimated fair value. See Note 6 above for more information. On April 12, 2022, the Company entered into a sublease agreement with a subtenant for 100% of the leased office space located at Santa Monica, California. The sublease agreement commenced on June 3, 2022 and will expire on July 17, 2024, unless sooner terminated. The Company has not been relieved of its primary obligation under the original lease and the sublease agreement has been classified as an operating lease. See Note 14 below for more information on the Santa Monica, CA lease.

Quantitative information for our leases was as follows (in thousands):

		December 31,
Consolidated Balance Sheets	Balance Sheet Classification	2022		2021
Assets
Operating lease assets	"Operating lease right-of-use-assets"	$	632	$	656
Finance lease assets	"Property and equipment, net"	66		186
Total lease assets		$	698	$	842
Liabilities
Current
Operating lease liabilities	"Current portion of operating lease liabilities"	$	653	$	595
Finance lease liabilities	"Other accrued liabilities"	136		282
Non-current
Operating lease liabilities	"Long-term operating lease liabilities"	546		932
Finance lease liabilities	"Long-term finance lease liabilities"	—		136
Total lease liabilities		$	1,335	$	1,945

	Year Ended December 31,
Consolidated Statements of Operations	2022		2021
Operating lease expense	$	448	$	722
Short-term lease rent expense	7		66
Variable lease expense	31		43
Operating sublease income	(225)		—
Total rent expense, net	$	261	$	831
Finance lease expense:
Amortization of leased assets	$	120	$	305
Interest on lease liabilities	19		42
Total	$	139	$	347

	Year Ended December 31,
Consolidated Statements of Cash Flows	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating lease	$	757	$	649
Financing cash flows from finance leases	282		325
Other
Cash received for operating sublease	$	257	$	—

	December 31,
Other Information	2022		2021
Weighted-average remaining lease term (years)
Operating lease	2.5		2.3
Financing leases	0.7		1.5
Weighted-average discount rate (%)
Operating lease	12.56	%	10.73	%
Finance leases	12.92	%	11.46	%

The following table sets forth maturities of our lease liabilities (in thousands):

	At December 31, 2022
	Operating Leases		Financing Leases		Total
2023	$	760	$	139	$	899
2024	420		—		420
2025	90		—		90
2026	93		—		93
2027	16		—		16
Total lease payments	1,379		139		1,518
Less: imputed interest	(180)		(3)		(183)
Present value of lease liabilities	1,199		136		1,335
Less: current portion	(653)		(136)		(789)
Lease liabilities, non-current	$	546	$	—	$	546

Leases

LeasesThe Company determines whether an arrangement is a lease, or contains a lease, at inception and recognizes right-of-use assets and lease liabilities, initially measured at present value of the lease payments, on our balance sheet and classifies the leases

as either operating or financing leases. The Company leases office space in Henderson, Nevada, which lease was entered into with an effective date of March 24, 2022 and serves as the Company's new headquarters, as well as in Santa Monica, California and in Rosemont, Illinois, which are accounted for as operating leases, and various computer equipment used in the operation of our business, which are accounted for as finance leases. The operating lease agreements include a total of 13,166 square feet of office space for lease terms ranging from 26 months to 60 months. The finance leases are generally for 36 month terms. The Company’s operating leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. The operating leases include renewal options and escalation clauses. The renewal options have not been included in the calculation of the operating lease liability and right-of-use asset as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses.

During the fourth quarter of 2021, the Company approved a plan for its headquarter office-based employees to work 100% remotely on a permanent basis and entered into an agreement with a broker to list the entire office space located in Santa Monica, CA for sublease. As a result of this real estate rationalization decision, an impairment analysis of our operating right-of-use asset resulted in an impairment charge of $0.9 million to reduce the carrying value of this asset to its estimated fair value. See Note 6 above for more information. On April 12, 2022, the Company entered into a sublease agreement with a subtenant for 100% of the leased office space located at Santa Monica, California. The sublease agreement commenced on June 3, 2022 and will expire on July 17, 2024, unless sooner terminated. The Company has not been relieved of its primary obligation under the original lease and the sublease agreement has been classified as an operating lease. See Note 14 below for more information on the Santa Monica, CA lease.

Quantitative information for our leases was as follows (in thousands):

		December 31,
Consolidated Balance Sheets	Balance Sheet Classification	2022		2021
Assets
Operating lease assets	"Operating lease right-of-use-assets"	$	632	$	656
Finance lease assets	"Property and equipment, net"	66		186
Total lease assets		$	698	$	842
Liabilities
Current
Operating lease liabilities	"Current portion of operating lease liabilities"	$	653	$	595
Finance lease liabilities	"Other accrued liabilities"	136		282
Non-current
Operating lease liabilities	"Long-term operating lease liabilities"	546		932
Finance lease liabilities	"Long-term finance lease liabilities"	—		136
Total lease liabilities		$	1,335	$	1,945

	Year Ended December 31,
Consolidated Statements of Operations	2022		2021
Operating lease expense	$	448	$	722
Short-term lease rent expense	7		66
Variable lease expense	31		43
Operating sublease income	(225)		—
Total rent expense, net	$	261	$	831
Finance lease expense:
Amortization of leased assets	$	120	$	305
Interest on lease liabilities	19		42
Total	$	139	$	347

	Year Ended December 31,
Consolidated Statements of Cash Flows	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating lease	$	757	$	649
Financing cash flows from finance leases	282		325
Other
Cash received for operating sublease	$	257	$	—

	December 31,
Other Information	2022		2021
Weighted-average remaining lease term (years)
Operating lease	2.5		2.3
Financing leases	0.7		1.5
Weighted-average discount rate (%)
Operating lease	12.56	%	10.73	%
Finance leases	12.92	%	11.46	%

The following table sets forth maturities of our lease liabilities (in thousands):

	At December 31, 2022
	Operating Leases		Financing Leases		Total
2023	$	760	$	139	$	899
2024	420		—		420
2025	90		—		90
2026	93		—		93
2027	16		—		16
Total lease payments	1,379		139		1,518
Less: imputed interest	(180)		(3)		(183)
Present value of lease liabilities	1,199		136		1,335
Less: current portion	(653)		(136)		(789)
Lease liabilities, non-current	$	546	$	—	$	546