Leases

9 Months Ended

Sep. 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 September 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 $1.0 million for the nine months ended September 30, 2023, of which $0.3 million was included in cost of goods sold and $0.7 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:	September 30, 2023		September 30, 2022
Operating lease cost	$	343	$	308
Operating lease - cash flow	$	369	$	319

Non-cash activity:
ROU assets obtained in exchange for lease liabilities	$	240	$	334

	Nine Months Ended		Nine Months Ended
Operating cash flow information:	September 30, 2023		September 30, 2022
Operating lease cost	$	1,020	$	926
Operating lease - cash flow	$	1,062	$	964


Non-cash activity:
ROU assets obtained in exchange for lease liabilities	$	581	$	545


	September 30, 2023			September 30, 2022
Weighted-average remaining lease term	2.0 years			3.0 years
Weighted-average discount rate		5	%		5	%

Future minimum lease payments under non-cancelable leases as of September 30, 2023:


2023 (remaining)	$	357
2024		1,172
2025		883
2026		165

Total future minimum lease payments	$	2,577
Less: imputed interest		(133	)
Present value of lease liabilities - current		1,165
Present value of lease liabilities - non-current	$	1,279