Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

v3.22.2.2
Commitments and Contingencies
6 Months Ended
Jun. 30, 2022
Commitments and Contingencies  
Commitments and Contingencies

8.    Commitments and Contingencies

Operating Leases

The Company leases office space under a non-cancellable operating lease that expires in January 2024 and has an option to renew this lease, with renewal rates to be negotiated. Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date we take possession of the property. At lease inception, we determine the lease term by assuming the exercise of those renewal options that are reasonably assured. The exercise of lease renewal options is at our sole discretion. The lease term is used to determine whether a lease is financing or operating and is used to calculate straight-line rent expense. Additionally, the depreciable life of leasehold improvements is limited by the expected lease term. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

The following table reflects our lease assets and our lease liabilities at June 30, 2022 (in thousands).

    

June 30, 

    

January 1,

2022

2022

Assets:

Operating lease right-of-use assets

$

166

$

212

Liabilities:

 

  

 

  

Operating lease liabilities, current

$

144

$

148

Operating lease liabilities, non-current

$

109

$

179

Operating lease liabilities, current, is included in Accrued Liabilities. Operating lease liabilities, non-current, is included in Other Liabilities.

Lease Costs:

The components of lease costs were as follows (in thousands):

    

Three Months Ended

    

Six Months Ended

June 30, 2022

June, 2022

Operating lease cost

$

28

$

55

Short-term lease cost

14

29

Total lease cost

$

42

$

84

As of June 30, 2022, the maturity of operating lease liabilities was as follows (in thousands):

2022 (remaining 6 months)

    

$

70

2023

 

173

2024

 

29

Total lease payments

 

272

Less: Interest

 

(19)

Present value of lease liabilities

$

253

8.    Commitments and Contingencies, continued

Lease Term and Discount Rate:

    

June 30, 2022

Weighted-average remaining lease term (in years)

 

1.7

Weighted-average discount rate

 

8.0

%

Other Information:

Supplemental cash flow information related to leases was as follows (in thousands):

    

Three Months Ended

    

Six Months Ended

June 30, 2022

June 30, 2022

Operating cash outflows from operating leases

$

41

$

83

Finance Lease

During August 2020, the Company entered into a lease agreement for equipment under a capital lease with a term of 36 months. The equipment under the lease is collateral for the agreement and is included within property and equipment, net on the condensed consolidated balance sheets.

Future minimum lease commitments for the finance lease as of June 30, 2022 are as follows:

(in thousands)

    

    

Payments due in:

 

  

Year ending December 31, 2022 (remaining 6 months)

$

13

Year ending December 31, 2023

 

15

Total minimum lease payments

 

28

Less: Amounts representing interest

 

(1)

Present value of finance lease obligations

 

27

Less: Current portion of finance lease liabilities

 

25

Other liabilities

$

2

Obligations under the finance lease are included in accrued liabilities and other liabilities on the condensed consolidated balance sheets.

Contingencies

In the normal course of business, the Company may become involved in legal proceedings. The Company will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of a possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. The accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside legal fees and other directly related costs expected to be incurred.

The Company’s management does not believe that any such matters, individually or in the aggregate, will have a materially adverse effect on the Company’s condensed consolidated financial statements.