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Note 10 - Leases | 12 Months Ended
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Dec. 31, 2021
Notes to Financial Statements |
Lessee, Operating Leases [Text Block] |
(10) | LEASES
As previously discussed in Note 2, we account for our leases in accordance with the guidance in ASC Topic 842. We lease our offices, warehouse facilities and certain equipment under non-cancellable operating leases that expire at various dates through 2031. Total operating lease and short-term lease costs for the years ended December 31, 2021 and 2020, respectively, were as follows:
|  | Years Ended December 31, |
|  | 2021 |  |  | 2020 |
Operating lease cost |  | $ | 1,191 |  |  | $ | 1,583 |
Short-term lease cost |  | $ | 82 |  |  | $ | 47 |
The following is additional information about our leases as of December 31, 2021:
Range of remaining lease terms (in years) | 0.3 | to | 9.3
Weighted average remaining lease term (in years) |  | 5.7 |
Weighted average discount rate |  | 4.2% |
Maturities of lease liabilities as of December 31, 2021 were as follows:
2022 |  | $ | 1,620 |
2023 |  |  | 1,613 |
2024 |  |  | 1,568 |
2025 |  |  | 735 |
2026 |  |  | 467 |
Thereafter |  |  | 1,378 |
Total lease payments |  | $ | 7,381 |
Less imputed interest |  |  | (762 | )
Total |  | $ | 6,619 |
Cash Flow Information Total amortization of ROU assets for the years ended December 31, 2021 and 2020 was $1,039 and $1,294, respectively. ROU Asset Impairment Charges During the fourth quarter of 2020, we recorded charges for non-cash impairments related to certain of our ROU assets as discussed further in Note 5. The total of these charges was $612. In determining whether our ROU assets were impaired, we considered the intended future use of the assets, including whether we expect to be able to sublease the related facilities. In both cases, we expected to eventually be able to sublease the facilities, but we did not expect to successfully negotiate a sublease for either facility in 2021. Our projected future cash inflows from sublease income reflected this expectation. In order to determine whether an impairment existed, we compared all future cash outflows related to the lease for the underlying ROU asset and compared this with our projected future cash inflows from the sublease. We developed several scenarios to model the expected timing and amount of sublease income we expect to receive. In all cases, the future cash outflows exceeded the expected future cash inflows, resulting in the conclusion that the ROU assets were impaired. We then discounted the projected deficit in each scenario using our estimated cost of capital and probability weighted the results to determine the amount of the impairment charge to record. As previously discussed in Note 5, on July 19, 2021, we executed a sublease for our facility in Fremont, which was one of the facilities for which we had recorded an impairment in the related ROU asset in 2020. The sublease commenced in August 2021 and ends November 30, 2025, which is the termination date of our lease for this facility. We entered into this sublease approximately 14 months earlier than we had estimated in December 2020. As a result, we will record approximately $350 of incremental sublease income above the level that we had estimated at the time that we recorded the impairment charge in December 2020. This income will be recorded ratably over the term of the sublease and will be included in other income in our consolidated statements of operations. Lease Modifications and Additions Supplemental cash flow information related to leases for the years ended December 31, 2021 and 2020 was as follows: Year ended December 31, 2021 Non-cash increases in operating lease liabilities and ROU assets as a result of acquisitions and the execution of new leases:
|  | Operating Lease Liabilities |  |  | ROU Assets |
Addition to facility leases – Fremont, CA |  | $ | 202 |  |  | $ | 202 |
Addition to facility leases – Videology |  | $ | 252 |  |  | $ | 252 |
Addition to automobile leases – Videology |  | $ | 54 |  |  | $ | 54 |
Addition to facility leases – Acquisition of Acculogic |  | $ | 78 |  |  | $ | 76 |
In August 2021, we executed a lease for office space for the engineering and sales staff located in Fremont, California. This lease has a 38.5 month term. At the effective date of this lease, we recorded an increase in our ROU assets and operating lease liabilities of approximately $202. On October 27, 2021, we acquired Videology as discussed further in Note 3. In November 2021, we executed a new lease for a facility for Videology’s operations in the Netherlands. This lease has a 37 month term. At the effective date of this lease, we recorded an increase in our operating lease liabilities and ROU assets of approximately $252. In addition, in December 2021, we executed a 48 month lease for an automobile for this same operation. At the effective date of this lease, we recorded an increase in our operating lease liabilities and ROU assets of approximately $54. On December 21, 2021, we acquired Acculogic as discussed further in Note 3. As a result of this acquisition, we recorded an increase in our lease liabilities and ROU assets of $78 and $76, respectively, related to a facility lease we acquired as a part of this transaction. Year ended December 31, 2020 Non-cash increases in operating lease liabilities and ROU assets as a result of lease modifications and the execution of new leases:
|  | Operating Lease Liabilities |  |  | ROU Assets |
Modification to lease for facility in Fremont, California |  | $ | 1,176 |  |  | $ | 1,176 |
Modification to lease for facility in Mt. Laurel, New Jersey |  | $ | 2,051 |  |  | $ | 2,051 |
Modification to lease for Ambrell’s Netherlands facility |  | $ | 133 |  |  | $ | 133 |
Additions to automobile leases |  | $ | 91 |  |  | $ | 91 |
On January 23, 2020, we executed an amendment to the lease for our EMS facility in Fremont, California, which extended the term for a period of 61 months commencing on November 1, 2020 and expiring on November 30, 2025. At the effective date of this modification, we recorded an increase in our ROU assets and operating lease liabilities of approximately $1,176. On September 22, 2020, we executed an amendment to the lease for our EMS facility in Mt. Laurel, New Jersey, which extended the term of the existing lease for a period of 120 months commencing on May 1, 2021. At the effective date of this modification, we recorded an increase in our ROU assets and operating lease liabilities of approximately $2,051. In addition, effective on August 1, 2021, the leased space was reduced to approximately 33,650 square feet. On October 1, 2020, the lease for Ambrell’s Netherlands facility automatically renewed for an additional three years. At the effective date of this modification, we recorded an increase in our ROU assets and operating lease liabilities of approximately $133. During the fourth quarter of 2020, we executed new leases for automobiles for certain of our employees in Europe. At the dates of execution, we recorded increases in our ROU assets and operating lease liabilities. The total increase recorded in 2020 related to these new leases was approximately $91.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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