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Leases | 9 Months Ended
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Sep. 30, 2022
Leases [Abstract] |
Leases | (9) Leases The Company has an operating lease for office space for its corporate headquarters in Seattle, Washington. It also has operating leases for office space in Mississauga, Canada and Wichita, Kansas. The Company leases its office facilities under operating lease agreements in accordance with ASC 842 and recognizes rent expense on a straight-line basis over the lease term with any lease incentives amortized as a reduction of rent expense over the lease term. The Company’s lease agreement with respect to office space in Seattle, Washington, as amended, expires on March 31, 2025. The Company has the option to terminate the lease in March 2023, subject to satisfaction of certain conditions, including a payment of a termination fee of approximately $671,000. In addition, as part of the agreement, the lessor paid towards the cost of certain leasehold improvements (“landlord contribution”) of which the Company could use approximately $180,000 of unused landlord contribution as a credit against any payment obligation under the lease. In the second quarter of 2019, the Company requested the $180,000 landlord contribution from the lessor as a reimbursement towards certain leasehold improvements and received those funds in the third quarter of 2019. In the first quarter of 2018, the lessor paid $373,000 towards certain leasehold improvements which the Company accounted for as a lease incentive and is amortizing as a reduction of rent expense over the lease term. Additionally, in April 2018, the lessor refunded the previously provided security deposit and the Company provided a letter of credit to the lessor in the amount of $575,000, which will be reduced by $100,000 annually starting in April 2019. Additionally, in the third quarter of 2020, the Company concluded that exercising its option to terminate this office lease in March 2023 had met the reasonably certain threshold and as such, the Company remeasured its ROU asset and liability associated with this lease as of September 30, 2020 based on the expected termination fee payment of approximately $671,000 and a lease termination date of March 2023. In September 2022, we provided notice to the landlord exercising our option to terminate the lease. We intent to make payment of approximately $671,000 on or before the termination date. We intend to procure alternative office space in the Seattle, Washington area before the termination date. The remaining lease obligation is classified within lease liability, current on our Condensed Consolidated Balance Sheet. The Company’s lease agreement with respect to office space in Mississauga, Canada commenced in November 2016, with a lease term of 60 months, expiring on November 30, 2021. During the third quarter of 2021, the Company entered into a lease extension to extend the lease on a month-to-month basis upon expiration of the current lease. We have elected to apply the short-term lease exemption. The Company commenced a new lease for an office space in Wichita, Kansas in June 2020 which continues for a period of 66 months, which we have determined as our expected lease term, and an option to extend the term for two additional periods of three years each. The Company has the option to terminate the lease pursuant to certain terms as specified in the lease without any termination fees if notice is provided. Lease cost recognized in the Company’s Condensed Consolidated Statements of Operations and other information is summarized as follows (in thousands):
|  | For the Nine Months Ended |  |  | For the Three Months Ended |
|  | September 30, 2022 |  |  | September 30, 2022 |
Operating lease cost |  | $ | 1,345 |  |  | $ | 464 |
Short-term operating lease cost |  |  | 181 |  |  |  | 73 |
Total operating lease cost |  | $ | 1,526 |  |  | $ | 537 |
Other information: |  |  |  |  |  |  |  |
Weighted-average remaining lease term - operating leases |  | 1.4 years |  |  |  |  |
Weighted-average discount rate - operating leases (1) |  |  | 4.7 | % |  |  |  |
| (1) | The discount rate used to compute the present value of total lease liabilities as of September 30, 2022 was based on the Company's estimated incremental borrowing rate of similar secured borrowings available to the Company as of the commencement date of lease.
As of September 30, 2022, the Company’s operating lease liabilities were as follows (in thousands):
|  | Total |
Gross future operating lease payments |  | $ | 2,030 |
Less: imputed interest |  |  | (77 | )
Present value of total operating lease liabilities |  |  | 1,953 |
Less: current portion of operating lease liabilities |  |  | (1,520 | )
Total long-term operating lease liabilities |  | $ | 433 |

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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 https://asc.fasb.org/subtopic&trid=77888251 + Details
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