KORE Group Holdings, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Right-of Use Assets and Lease Liabilities

Right-of Use Assets and Lease Liabilities

3 Months Ended

Mar. 31, 2022

Lessee Disclosure [Abstract]

Right-of Use Assets and Lease Liabilities

NOTE 5 –

RIGHT-OF

USE ASSETS AND LEASE LIABILITIES

We lease real estate, computer hardware and vehicles for use in our operations under both operating and finance leases. Our leases have remaining lease terms ranging from 1 year to 10 years, some of which include options to extend the term for up to 10 years, and some of which include options to terminate the leases. For the majority of leases entered into during the current period, we have concluded it is not reasonably certain that we would exercise the options to extend the lease or terminate the lease

early

. Therefore, as of the lease commencement date, our lease terms generally do not include these options. We include options to extend the lease when it is reasonably certain that we will exercise that option.

Leasehold improvements are depreciated using the straight-line method over the shorter of the estimated useful life or the remaining term of the lease. Our leasehold improvements have lives ranging from 4-15 years.

Operating lease cost for the three months ended March 31, 2022 and 2021 was

$0.8 million and $0.7 million, respectively.


(in 000’ USD)	Classification in Statement of operations		Three Months Ended March 31, 2022

Operating lease cost		Selling, general and administrative	$	844
Finance lease cost
Amortization of leased assets		Depreciation and amortization		98
Interest on lease liabilities		Interest expense		5

Total net lease cost			$	947

Supplemental disclosure for the balance sheet related to finance leases were as follows:


(in 000’ USD)	As of March 31, 2022
Assets
Finance lease right-of-use assets included in property and equipment, net	$	386
Liabilities
Current portion of finance lease liabilities	$	158
Non-current portion of finance lease liabilities		228

Total finance lease liabilities	$	386

The weighted-average remaining lease term and the weighted-average discount rate of our leases

were

as follows:


	At March 31, 2022
Weighted average remaining lease term (in years)
Operating leases		6.4
Finance leases		2.5
Weighted average discount rate:
Operating leases		7.1	%
Finance leases		5.2	%

The future minimum lease payments under operating and finance leases as of March 31, 2022 for the next five years are as follows:


	Operating Leases			Finance Leases
(in ‘000 USD)	Amount			Amount
From April 1, 2022 to December 31, 2022	$	1,969		$	130
2023		2,189			141
2024		1,476			118
2025		1,313			25
2026		1,041			—
Thereafter		4,141			—

Total minimum lease payments		12,129			414
Interest expense		(2,672	)		(28	)

Total	$	9,457		$	386