XML 151 R12.htm IDEA: XBRL DOCUMENT

Leases

9 Months Ended

Sep. 30, 2023

5. Leases

The Company’s real estate lease for the use of office space is subleased (as further described below). The Company’s current lease is a long-term operating lease with a remaining fixed payment term of 1.01 years.

The table below presents supplemental information related to operating leases:

	Nine Months Ended September 30,
	2023			2022
Operating lease costs during the period (1)	$	758		$	727
Cash payments included in the measurement of operating lease liabilities during the period	$	362		$	351
Weighted-average remaining lease term (in years) as of period-end		1.01			2.01
Weighted-average discount rate during the period		9.9	%		9.9	%

(1)	Operating lease costs is presented net of sublease income that is not material.

The Company generally utilizes its incremental borrowing rate based on information available at the commencement of the lease in determining the present value of future payments since the implicit rate for the Company’s leases is not readily determinable.

Variable lease expense includes rental increases that are not fixed, such as those based on amounts paid to the lessor based on cost or consumption, such as maintenance and utilities.

The components of operating lease costs were as follows:

Schedule of Operating Lease Costs


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Operating lease costs:
Cost of revenue	$	-		$	-		$	-		$	-
Selling and marketing		-			-			-			-
General and administrative		259			328			922			891
Total operating lease costs (1)		259			328			922			891
Sublease income		(55	)		(55	)		(164	)		(164	)
Total	$	204		$	273		$	758		$	727

(1)

Includes certain costs associated with a business membership agreement (see below) that permits access to certain office space for the three and nine months ended September 30, 2023 of $155 and $465, respectively, and month-to-month lease arrangements for the three and nine months ended September 30, 2023 of $95 and $266, respectively.

Maturities of the operating lease liability as of September 30, 2023 are summarized as follows:

Years Ending December 31,
2023 (remaining three months of the year)	$	124
2024		373
Minimum lease payments		497
Less imputed interest		(26	)
Present value of operating lease liability	$	471
Current portion of operating lease liability	$	471
Long-term portion of operating lease liability		-
Total operating lease liability	$	471

Sublease Agreement – In November 2021, the Company entered into an agreement to sublease its leased office space for the duration of its operating lease through September 2024. As of September 30, 2023, the Company is entitled to receive sublease income of $288.

Business Membership – Effective October 1, 2021, the Company entered into a business membership agreement with York Factory LLC, doing business as SaksWorks, that permits access to certain office space with furnishings (the “membership”), referred to as SaksWorks Memberships. This membership provides a certain number of accounts that equate to the use of the space granted. Effective June 1, 2022, the SaksWorks membership agreement was amended and assigned to Convene SW MSA Holdings, LLC (“Convene”). The term of the agreement with Convene is for twenty-seven months from the initial effective date of October 1, 2021 with SaksWorks. The annual membership fee with Convene is $620 ($500 for dedicated area and $120 for minimum membership accounts) payable in equal monthly installments. The agreement also provides for: (1) additional accounts at predetermined pricing; and (2) renewal of the agreement at the end of the term for a twelve-month period at the then-current market price and pricing structure on such renewal date. As of September 30, 2023, the Company had $259 of remaining payments under the agreement with Convene.