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, 2022

8.	Operating Leases

As of January 31, 2022, the Company had operating leases for facilities expiring at various dates through 2026.

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,
	2022		2021
	(Amounts in thousands)
Operating lease cost	$	749	$	1,351
Short term lease cost, net		17		34
Total lease cost	$	766	$	1,385

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

	For the Fiscal Years Ended January 31,
	2022		2021
	(Amounts in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,168	$	1,072

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

	As of January 31, 2022			As of January 31, 2021
	(Amounts in thousands)
Operating lease right-of-use assets	$	2,031		$	4,968

Current portion, operating lease liabilities		762			1,387
Operating lease liabilities, long term		1,361			4,070
Total operating lease liabilities	$	2,123		$	5,457

Weighted average remaining lease term (years)		3.0			4.0
Weighted average incremental borrowing rate		5.0	%		5.0	%

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, 2022 are as follows:

	Payments for Operating Leases
For the Fiscal Years Ended January 31,	(Amounts in thousands)
2023	$	763
2024		751
2025		775
Total lease payments		2,289
Less interest		166
Total operating lease liabilities	$	2,123

In fiscal 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.

Additionally, in fiscal 2022, the Company entered into two operating sublease agreements (collectively, the “Subleases”) with respect to part of its existing Poland facility lease (the “Head Lease”). 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. The Subleases are short term and have effective end dates of less than one year from January 31, 2022. The Head Lease rent expense is presented net of sublease income and reported as a component of operating expenses on the consolidated statements of operations and comprehensive loss. The Company recorded $77 thousand of sublease income for the fiscal year ended January 31, 2022.