Leases

6 Months Ended

Jun. 30, 2024

7. Leases

During January 2024 and April 2024, the Company modified the lease agreement of the Ventura production facility to extend the lease term. The modifications resulted in an aggregate increase of approximately $2.1 million to the operating lease ROU assets and operating lease liabilities. There was no impact on earnings as a result of the lease modification.

The following table sets forth the Company’s operating lease expenses which are included in operating expenses in the Consolidated Statements of Operations (in thousands):


	Three-Months Ended				Six-Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Operating lease cost	$	298	$	197	$	594	$	395
Variable lease cost		36		13		71		26
Total lease cost	$	334	$	210	$	665	$	421

Supplemental cash flow information related to operating leases for the three-months and six-months ended June 30, 2024 and 2023 (in thousands):


	Three-Months Ended				Six-Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	293	$	205	$	587	$	410

Supplemental balance sheet information, as of June 30, 2024 and December 31, 2023, related to operating leases was as follows (in thousands, except for operating lease weighted average remaining lease term and operating lease weighted average discount rate):


	As of
	June 30, 2024			December 31, 2023
Reported as:
Operating lease right-of-use assets	$	3,938		$	2,440
Total right-of-use assets	$	3,938		$	2,440
Other current liabilities:
Operating lease liabilities, short-term	$	820		$	895
Operating lease liabilities, long term		3,281			1,702
Total operating lease liabilities	$	4,101		$	2,597
Operating lease weighted average remaining lease term (years)		4.77			3.31
Operating lease weighted average discount rate		9.69	%		8.75	%

As of June 30, 2024, maturities of the Company’s operating lease liabilities are as follows (in thousands):


	Operating Leases
Remainder of 2024	$	598
2025		1,165
2026		1,125
2027		773
2028		658
Thereafter		853
Total lease payments		5,172
Less imputed interest		(1,071	)
Total operating lease liabilities	$	4,101

As of June 30, 2024, there were no leases entered into that had not yet commenced.

Lessor Arrangements

As discussed in Note 5 of our Consolidated Financial Statements, the contracts for the RECELL GO device include an operating lease for the customer’s right to use the RPD. The lease is recorded as an operating lease. The RPD is provided to the customer for no additional consideration. The variable consideration related to the lease is allocated based on the SPP and it is recognized upon purchase of the RPK.

The table below summarizes the Company's lease revenues as presented in the Consolidated Statement of Operations for the three and six-months ended June 30, 2024 and 2023. The lease arrangement does not contain fixed consideration. Variable lease payments are not included in consideration at lease inception.


	Three and Six-Months Ended
(in thousands)	June 30, 2024
Variable lease revenue	$	12

Assets held for lease and included in property and equipment consisted of the following (in thousands):


	As of
	June 30, 2024
Rental RPD assets	$	222
Accumulated depreciation		(2	)
Net rental RPD assets	$	220