SeaChange International, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Operating Leases

Operating Leases

12 Months Ended

Jan. 31, 2023

As of January 31, 2023, the Company had operating leases for facilities expiring at various dates through fiscal year 2025.

The components of lease expense included in the consolidated statements of operations and comprehensive loss are as follows:


	For the Fiscal Years Ended January 31,
	2023		2022
	(Amounts in thousands)
Operating lease cost	$	465	$	749
Short term lease cost, net		15		17
Total lease cost	$	480	$	766

Supplemental balance sheet information related to the Company’s operating leases was as follows:


	As of January 31, 2023			As of January 31, 2022
	(Amounts in thousands)
Operating lease right-of-use assets	$	1,360		$	2,031

Current portion, operating lease liabilities		713			762
Operating lease liabilities, long term		691			1,361
Total operating lease liabilities	$	1,404		$	2,123

Weighted average remaining lease term (years)		2.0			3.0
Weighted average incremental borrowing rate		5.0	%		5.0	%

Supplemental cash flow information related to the Company’s operating leases was as follows:


	For the Fiscal Years Ended January 31,
	2023		2022
	(Amounts in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	526	$	1,168

The current portion, operating lease liabilities is included as a component of accrued expenses in the consolidated balance sheets.

Future minimum lease payments for operating leases with initial or remaining terms in excess of one year as of January 31, 2023 are as follows:


	Payments for Operating Leases
For the Fiscal Years Ended January 31,	(Amounts in thousands)
2024	$	730
2025		753
Total lease payments		1,483
Less interest		79
Total operating lease liabilities	$	1,404

During the fiscal year ended January 31, 2022, the Company entered into the Termination Agreement with respect to its former headquarters in Waltham, Massachusetts. In connection to the Termination Agreement, the Company paid the sublandlord termination payments of approximately $0.4 million in fiscal 2022. The Company also wrote off all related operating lease right-of-use assets and liabilities as of the termination date, resulting in a $0.3 million non-cash gain, which partially offset the loss on the termination payments. The net $0.1 million loss on lease termination is reported as a component of severance and restructuring expense on the consolidated statements of operations and comprehensive loss for the fiscal year ended January 31, 2022. Prior to the execution of the Termination Agreement, the sublease had been scheduled to expire in February 2025.

The Company has entered into four operating sublease agreements (collectively, the “Subleases”) with respect to part of its existing Poland facility lease (the “Head Lease”), two in fiscal 2022 and two in fiscal 2023. The Company accounted for the Head Lease and the Subleases as separate contracts and there was no effect on the right-of-use asset or lease liability associated with the Head Lease. One of the Subleases entered into fiscal 2022 ended during fiscal 2023. The remaining Subleases entered into fiscal 2022 and 2023 have effective dates ranging from less than one year to more than two years from January 31, 2023, respectively. The Head Lease rent expense is presented net of income related to the Subleases and reported as a component of operating expenses on the consolidated statements of operations and comprehensive loss. The Company recorded $0.2 million and $0.1 million of income related to the Subleases for the year ended January 31, 2023 and 2022, respectively.