Inpixon Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Leases

Leases

6 Months Ended

Jun. 30, 2022

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

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 $2,618 and $1,053 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 $9,753 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 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, 2022		As of December 31, 2021
Palo Alto, CA Office	$	631	$	631
Hyderabad, India Office	358		359
Coquitlam, Canada Office	95		97
Westminster, Canada Office	—		10
Toronto, Canada Office	593		949
Ratingen, Germany Office	83		90
Berlin, Germany Office	494		536
Slough, United Kingdom Office	—		34
Frankfurt, Germany Office	287		312
Manila, Philippines Office	250		—
Less accumulated amortization	(1,209)		(1,282)
Right-of-use asset, net	$	1,582	$	1,736

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 statement of income for the three months ended June 30, 2022 and 2021 was $0.3 million and $0.3 million, respectively, and for the Six months ended June 30, 2022 and 2021 was $0.7 million and $0.6 million, respectively.

Lease liability is summarized below (in thousands):


	As of June 30, 2022		As of December 31, 2021
Total lease liability	$	1,622	$	1,751
Less: short term portion	(600)		(643)
Long term portion	$	1,022	$	1,108

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


Year ending December 31, 2022	$	412
Year ending December 31, 2023	546
Year ending December 31, 2024	457
Year ending December 31, 2025	279
Year ending December 31, 2026	99
Total	$	1,793
Less: Present value discount	(171)
Lease liability	$	1,622

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, 2022, the weighted average remaining lease term is 3.97 years and the weighted average discount rate used to determine the operating lease liabilities was 6.4%.