Quarterly report [Sections 13 or 15(d)]

Leases

v3.25.1
Leases
3 Months Ended
Mar. 31, 2025
Leases [Abstract]  
Leases

Note 8 – Leases

The Company leases office space, company-owned transition studios, warehouse, training centers and a video recording studio. Certain real estate leases include one or more options to renew.

Right-of-use (“ROU”) assets from operating leases are subject to the impairment guidance in ASC Topic 360, Property, Plant, and Equipment, and are reviewed for impairment when indicators of impairment are present. ASC Topic 360 requires three steps to identify, recognize and measure impairment. If indicators of impairment are present (Step 1), the Company performs a recoverability test (Step 2) comparing the sum of the estimated undiscounted cash flows attributable to the ROU asset in question to the carrying amount. If the undiscounted cash flows used in the recoverability test are less than the carrying amount, the Company estimates the fair value of the ROU asset and recognizes an impairment loss when the carrying amount exceeds the estimated fair value (Step 3). When determining the fair value of the ROU asset, the Company estimated what market participants would pay to lease the assets assuming the highest and best use in the assets' current forms. The Company recognized ROU asset impairment charges of $1,915 and $0 during the three months ended March 31, 2025 and 2024, respectively.

Supplemental balance sheet information related to leases is summarized as follows:

 

Operating leases

 

Balance Sheet Location

 

March 31, 2025

 

 

December 31, 2024

 

ROU assets, net

 

 Right-of-use assets

 

$

21,060

 

 

$

24,036

 

Lease liabilities, short-term

 

Other current liabilities

 

$

5,593

 

 

$

5,276

 

Lease liabilities, long-term

 

 Lease liability

 

$

22,582

 

 

$

23,858

 

 

The following table presents the components of lease expense during the three months ended March 31, 2025 and 2024:

 

 

 

Three months ended March 31,

 

 

 

2025

 

 

2024

 

Operating lease costs

 

$

1,971

 

 

$

3,861

 

Variable lease costs

 

 

208

 

 

 

173

 

Total

 

$

2,179

 

 

$

4,034

 

The following table presents the supplemental cash flow information related to operating leases during the three months ended March 31, 2025 and 2024:

 

 

 

Three months ended March 31,

 

 

 

2025

 

 

2024

 

Cash paid for amounts included in the measurement of operating lease liabilities

 

$

1,635

 

 

$

1,503

 

The following table presents other information related to leases:

 

 

 

March 31, 2025

 

 

December 31, 2024

 

Weighted average remaining lease term (years)

 

 

5.1

 

 

 

4.7

 

Weighted average discount rate

 

 

9.5

%

 

 

8.8

%

 

Maturities of lease liabilities as of March 31, 2025 are summarized as follows:

 

 

 

Amount

 

 

Remainder of 2025

 

$

6,404

 

 

2026

 

 

7,583

 

 

2027

 

 

6,961

 

 

2028

 

 

4,608

 

 

2029

 

 

3,846

 

 

Thereafter

 

 

6,462

 

 

Total future lease payments

 

 

35,864

 

 

Less: imputed interest

 

 

7,689

 

 

Total

 

$

28,175