Leases

6 Months Ended

Jun. 30, 2023

8. Leases

The Company has operating leases for office and warehouse space and equipment under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. The Company’s lease portfolio consists of operating leases which expire at various dates through 2026.

Certain of the Company’s lease arrangements contain renewal provisions, exercisable at the Company's option. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company determines if an arrangement is an operating lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. All other leases are recorded on the balance sheet with right-of-use (“ROU”) assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease.

Operating lease cost was $0.3 million for the three months ended June 30, 2023, of which $0.1 million was included in cost of goods sold and $0.2 million was included in selling, general and administrative expenses. Operating lease cost was $0.7 million for the six months ended June 30, 2023, of which $0.2 million was included in cost of goods sold and $0.5 million was included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Information related to leases (in thousands):


	Three Months Ended		Three Months Ended
Operating cash flow information:	June 30, 2023		June 30, 2022
Operating lease cost	$	344	$	308
Operating lease - cash flow	$	346	$	322

Non-cash activity:
ROU assets obtained in exchange for lease liabilities	$	-	$	-

	Six Months Ended		Six Months Ended
Operating cash flow information:	June 30, 2023		June 30, 2022
Operating lease cost	$	678	$	618
Operating lease - cash flow	$	693	$	645


Non-cash activity:
ROU assets obtained in exchange for lease liabilities	$	341	$	211


	June 30, 2023			June 30, 2022
Weighted-average remaining lease term	3.0 years			3.0 years
Weighted-average discount rate		5	%		5	%

Future minimum lease payments under non-cancellable leases as of June 30, 2023:


2023 (remaining)	$	650
2024		1,044
2025		816
2026		165

Total future minimum lease payments	$	2,675
Less: imputed interest		(146	)
Present value of lease liabilities - current		1,122
Present value of lease liabilities - non-current	$	1,407