LEASES

3 Months Ended

Mar. 31, 2023

To conduct certain of our operations, the Company is a party to leases for office space, warehouses and Company-operated store locations. In December 2022, the Company entered into a lease agreement, which expires in 2033, for its new headquarters to accommodate its growing workforce. The Company expects to complete the move to the new headquarters in the second half of 2023 following the completion of leasehold improvements. The new lease agreement provides for the Company to receive a tenant allowance amounting to approximately $3.8 million through the third quarter of 2023 and the Company will commence making monthly lease payments on November 1, 2024. Such tenant allowance has been recorded within prepaid expenses and other current assets in the condensed consolidated balance sheet.

The presentation of right-of-use assets and lease liabilities in the condensed consolidated balance sheet is as follows (in thousands):


Leases	Classification	March 31, 2023		December 31, 2022
Assets
Right-of-use assets	Other assets(1)	$	23,279	$	24,768
Total leased assets		$	23,279	$	24,768

Liabilities
Current
Operating	Accrued and other liabilities	$	4,787	$	5,258
Noncurrent
Operating	Lease liabilities	21,872		23,272
Total Lease liabilities		$	26,659	$	28,530

(1) Operating right of-use assets are recorded net of accumulated amortization of $7.1 million and $5.6 million as of March 31, 2023 and December 31, 2022, respectively.

Lease expense for the three months ended March 31, 2023 and 2022, was as follows (in thousands):


		Three Months Ended March 31,
Lease Cost	Classification	2023		2022
Operating lease cost	Other selling, general and administrative expenses	$	2,064	$	468

For the three months ended March 31, 2023 and 2022, the Company’s weighted-average remaining lease terms on its operating leases was 6.8 years and 4.0 years, respectively, and the Company’s weighted-average discount rate was 5.77% and 2.59%, respectively, which is the Company’s incremental borrowing rate. The Company used its incremental borrowing rate for all leases, as none of the Company’s lease agreements provide a readily determinable implicit rate.

Lease Payments

Future minimum lease payments for assets under non-cancelable operating lease agreements with original terms of more than one year for the remainder of 2023 and thereafter are as follows (in thousands):


2023	$	3,835
2024	4,938
2025	5,681
2026	4,274
2027	3,167
Thereafter	14,658
Total lease payments	36,553
Less: Imputed interest	(9,894)
Present value of lease liabilities	$	26,659