Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

v3.22.1
Commitments and Contingencies
3 Months Ended
Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

9. Commitments and Contingencies

 

Leases

 

Effective January 1, 2022, the Company adopted ASC Topic (ASC 842) using the modified retrospective approach by applying the new standard to all leases existing on the adoption date. The results for reporting periods beginning after January 1, 2022 are presented in accordance with ASC 842, while prior period amounts are not adjusted and continue to be reported under the accounting standards that were in effect prior to January 1, 2022.

 

The Company leases its office facilities in San Francisco, California under a non-cancelable operating lease agreement that expires February 2025. In addition, the Company’s subsidiary has several operating lease agreements for office space in Bangladesh, which expire at various dates through December 2028. The Bangladesh lease agreements allow for early cancellation without penalty upon providing the landlord advance notice of at least six months. The Company elected the practical expedient to recognize leases less than one year under ASC 840.

 

Supplemental balance sheet information related to leases as of March 31, 2022 is as follows (in thousands):

 

Operating leases:      
Operating lease right-of-use assets   $ 2,074  
         
Operating lease liability, current portion   $ 853  
Operating lease liability, net of current portion     1,562  
Total operating lease liabilities   $ 2,415  

 

Supplemental lease expense related to leases was as follows:

 

Lease Cost (in thousands)   Statements of Operations Classification   Three
Months
Ended
March 31,
2022
(unaudited)
 
Operating lease cost:            
    Cost of revenues   $   7  
    General and administrative     69  
    Sales and marketing     64  
    Research and development     51  
Total operating lease cost       $ 191  

 

Other information related to the operating lease where the Company is the lessee is as follows:

 

   

Three
Months
Ended
March 31,
2022
(unaudited)

 
Weighted-average remaining lease term     3.0  
Weighted-average discount rate     4.0 %

 

Supplemental cash flow information related to the operating lease is as follows (in thousands):

 

   

Three
Months
Ended
March 31,
2022
(unaudited)

 
Cash paid for operating lease liabilities   $ 209  

 

As of March 31, 2022, the maturities of the Company’s operating lease liabilities (excluding short-term leases) are as follows (in thousands):

 

2022 (remaining nine months)   $
 
2023     855  
2024     881  
2025     829  
Total   $ 2,565  
Less: imputed interest     (150 )
Operating lease liability     2,415  
Less: Operating lease liability, current portion     853  
Operating lease liability, net of current portion   $ 1,562  

 

Cloud Computing Services

 

In June 2021, the Company entered into a non-cancelable three-year contract to obtain cloud computing services. The minimum contractual spend over the three-year term is $1.8 million. As of March 31, 2022, the Company has spent approximately $0.1 million against this contract.

 

Legal

 

In the normal course of business, the Company may receive inquiries or become involved in legal disputes regarding various litigation matters. In the opinion of management, any potential liabilities resulting from such claims would not have a material adverse effect on the Company’s  condensed consolidated financial position or, results of operations or cash flows. As a result, no liability related to such claims has been recorded at March 31, 2022 or December 31, 2021.

 

Indemnification Agreements

 

From time to time, in the normal course of business, the Company may indemnify other parties when it enters into contractual relationships, including members of the Company’s board of directors, employees, customers, lessors and parties to other transactions with the Company. The Company may agree to hold other parties harmless against specific losses, such as those that could arise from a breach of representation, covenant or third-party infringement claims. It may not be possible to determine the maximum potential amount of liability under such indemnification agreements due to the unique facts and circumstances that are likely to be involved in each particular claim and indemnification provision. Management believes any liability arising from these agreements will not be material to the unaudited interim condensed consolidated financial statements. As a result, no liability for these agreements has been recorded at March 31, 2022 or December 31, 2021.