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Leases

6 Months Ended

12 Months Ended

Jun. 30, 2023

Dec. 31, 2022

Note 22 — Leases

The Company has operating leases for administrative offices in the United States (California), India, the United Kingdom and Germany.

The Company entered into two new operating leases for its administrative offices in Ratingen, Germany, both from February 1, 2021 through January 1, 2023. The Company extended the office lease for six months, expiring on July 31, 2023. The monthly lease rate is $5,756 per month.

As part of the acquisition of IntraNav on December 9, 2021. the Company acquired right-of-use assets and lease liabilities related to an operating lease for an office space (the IntraNav office) located in Frankfurt, Germany. This lease expires on January 6, 2025 and the current lease rate is approximately $9,340 per month.

The Company entered into two new operating leases for its administrative office in Hyderabad, India and Manila, Philippines. The Hyderabad, India and Manila, Philippines office lease expires on March 25, 2025 and May 14, 2025, respectively.

The Company early terminated one of its administrative offices in Hyderabad, India which generated an immaterial gain on lease termination which is included in the operating expenses section of the Condensed Consolidated Statements of Operations.

The Company has no other operating or financing leases with terms greater than 12 months.

Right-of-use assets are summarized below (in thousands):

	As of June 30, 2023			As of December 31, 2022
Palo Alto, CA Office	$	630		$	630
Hyderabad, India Office		19			—
Ratingen, Germany Office		86			85
Berlin, Germany Office		514			508
Frankfurt, Germany Office		298			294
Less accumulated amortization		(1,113	)		(986	)
Right-of-use asset, net	$	434		$	531

Lease expense for operating leases recorded in the balance sheet is included in operating costs and expenses and is based on the future minimum lease payments recognized on a straight-line basis over the term of the lease plus any variable lease costs. Operating lease expenses, inclusive of short-term and variable lease expenses, recognized in our condensed consolidated statement of income for the three months ended June 30, 2023 and 2022 was $0.2 million and $0.1 million, respectively, and for the six months ended June 30, 2023 and 2022 was $0.3 million and $0.3 million, respectively.

Lease liability is summarized below (in thousands):

	As of June 30, 2023			As of December 31, 2022
Total lease liability	$	445		$	545
Less: short term portion		(200	)		(211	)
Long term portion	$	245		$	334

Maturity analysis under the lease agreement is as follows (in thousands):

Six months ending December 31, 2023	$	108
Year ending December 31, 2024		216
Year ending December 31, 2025		109
Year ending December 31, 2026		41
Year ending December 31, 2027		—
Year ending December 31, 2028 and thereafter		—
Total	$	474
Less: Present value discount		(29	)
Lease liability	$	445

Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the date of adoption of ASC 842, “Leases” (“ASC 842”). As of June 30, 2023, the weighted average remaining lease term is 2.4 years and the weighted average discount rate used to determine the operating lease liabilities was 4.0%.

Note 29 — Leases

The Company has operating leases for administrative offices in the United States (California), Canada, India, United Kingdom and Germany.

The Company terminated the lease in Ratingen, Germany in January 2021. The Company entered into two new operating leases for its administrative offices in Ratingen, Germany, both from February 1, 2021 through January 1, 2023. The monthly lease rate is approximately $2,774 and $1,083 per month. The Company renewed the operating lease, which expires on July 31, 2023. The new monthly lease rate is approximately $2,028 and $1,633.

Right-of-use assets is summarized below (in thousands):

	As of December 31, 2022			As of December 31, 2021
Palo Alto, CA Office	$	630		$	631
Hyderabad, India Office		342			359
Coquitlam, Canada Office		91			97
Westminster, Canada Office		—			10
Toronto, Canada Office		565			949
Ratingen, Germany Office		85			90
Berlin, Germany Office		508			536
Slough, United Kingdom Office		—			34
Frankfurt, Germany Office		294			312
Manila, Philippines Office		247			—
Less accumulated amortization		(1,550	)		(1,281	)
Right-of-use asset, net	$	1,212		$	1,737

Less discontinued operations		(681	)		(724	)
Right-of-use asset, continuing operations	$	531		$	1,013

Lease expense for operating leases recorded in the balance sheet is included in operating costs and expenses and is based on the future minimum lease payments recognized on a straight-line basis over the term of the lease plus any variable lease costs. Operating lease expenses, inclusive of short-term and variable lease expenses, recognized in our consolidated statements of operations for both years ended December 31, 2022 and 2021 was $1.2 million, of which 0.6 million for both years pertain to discontinued operations.

During the years ended December 31, 2022 and 2021, the Company recorded $0.7 million each year as rent expense to the right-of-use assets, of which $0.4 million pertain to discontinued operations.

During the years ended December 31, 2022 and 2021, the Company recorded short-term and variable lease expenses of $0.5 million and $0.3 million each year, respectively, of which $0.3 million and $0.2 million pertain to discontinued operations.

Lease liability is summarized below (in thousands):

	As of December 31, 2022			As of December 31, 2021
Total lease liability	$	1,255		$	1,751
Less: short term portion		(477	)		(643	)
Long term portion	$	778		$	1,108

Less discontinued operations		(444	)		(531	)
Long term portion, continuing operations	$	334		$	577

Maturity analysis under the lease agreement is as follows (in thousands):

Year ending December 31, 2023	$	539
Year ending December 31, 2024		454
Year ending December 31, 2025		275
Year ending December 31, 2026		98
Year ending December 31, 2027		—
Total	$	1,366
Less: Present value discount		(111	)
Lease liability	$	1,255

Less discontinued operations		(710	)
Lease liability, continuing operations	$	545

Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the date of adoption of Topic 842. As of December 31, 2022, the weighted average remaining lease term is 2.79 and the weighted average discount rate used to determine the operating lease liabilities was 6.3%.