Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.22.1
Leases
3 Months Ended
Mar. 31, 2022
Leases [Abstract]  
LEASES

NOTE 6 - LEASES

As described in “Note 3 - Accounting Standards” the Company adopted ASC 842, Leases, on January 1, 2022. Prior periods presented have not been adjusted and continue to be reported in accordance with the legacy guidance in ASC 840, Leases. The Company’s capital lease assets and related accumulated amortization were recorded as property and equipment and the capital lease liabilities were recorded as current and long-term capital lease obligations on the condensed consolidated balance sheet as of December 31, 2021. See “Note 5 - Property and Equipment, Net” and “Note 11 - Debt” regarding disclosure of capital leases.

The Company has operating and financing leases for office facilities, light duty vehicles and equipment. The Company does not have any material lessor arrangements.

The weighted average remaining lease term and discount rates used in the measurement of the Company’s right-of-use assets and lease liabilities are as follows:

 

 

March 31, 2022

Weighted average remaining lease term:

 

 

Operating leases

 

1.8 years

Finance leases

 

3.1 years

Weighted average discount rate:

 

 

Operating leases

 

8.9%

Finance leases

 

8.4%

The components of lease expense consisted of the following:

 

 

Three Months Ended

 

 

 

March 31, 2022

 

Operating lease expense

 

$

316

 

Short-term lease expense

 

 

9,268

 

Finance lease expense:

 

 

 

Amortization of right-of-use assets

 

 

308

 

Interest on lease liabilities

 

 

78

 

Total

 

$

9,970

 

In accordance with prior guidance, ASC 840, rent expense was $0.3 million for the three months ended March 31, 2021, of which $0.2 million was recorded as cost of services and $0.1 million was recorded as selling, general and administrative expenses in the condensed consolidated statements of operations.

Supplemental cash flow information related to leases is as follows:

 

 

Three Months Ended

 

 

 

March 31, 2022

 

Cash paid for amounts included in the measurement of lease liabilities

 

 

 

Operating cash flows used for operating lease

 

$

248

 

Financing cash flow used for finance leases

 

$

233

 

Right-of-use assets upon adoption of ASC 842 and obtained in exchange for new lease liabilities

 

 

 

Operating leases

 

$

1,678

 

Finance leases

 

$

3,690

 

As of March 31, 2022, the future maturities of lease liabilities are as follows:

Fiscal Year

 

Operating Leases

 

 

Finance Leases

 

Remainder of 2022

 

$

959

 

 

$

1,150

 

2023

 

 

325

 

 

 

1,050

 

2024

 

 

258

 

 

 

1,050

 

2025

 

 

67

 

 

 

592

 

2026

 

 

-

 

 

 

1

 

Total lease payments

 

 

1,609

 

 

 

3,843

 

Less: imputed interest

 

 

(119

)

 

 

(303

)

Total lease liabilities

 

$

1,490

 

 

$

3,540

 

As of December 31, 2021, in accordance with prior guidance, ASC 840, the minimum future payments on non-cancellable operating leases and capital leases are as follows:

Fiscal Year

 

Operating Leases

 

 

Capital Leases

 

2022

 

$

1,107

 

 

$

1,241

 

2023

 

 

308

 

 

 

896

 

2024

 

 

258

 

 

 

891

 

2025

 

 

67

 

 

 

447

 

Total

 

$

1,740

 

 

$

3,475

 

The total capital lease payments include imputed interest.

In October 2021, the Company completed a sale-leaseback transaction for a short-term operating lease. The Company deferred a $7.4 million gain from disposal of assets to accrued expenses and other current liabilities to amortize over the minimum term of the lease. As of March 31, 2022 and December 31, 2021, the remaining deferred gain on the sale-leaseback transaction was $3.7 million and $5.6 million, respectively.