Lease Commitments

12 Months Ended

Dec. 31, 2022

Lease Commitments

Lease Commitments

(6) Lease Commitments

The Company’s operating lease portfolio is comprised of operating leases for office, warehouse space and equipment. Certain of the Company’s leases include one or more options to renew or terminate the lease at the Company’s discretion. The Company regularly evaluates the renewal and termination options and when they are reasonably certain of exercise, includes the renewal or termination option in our lease term. During the first calendar year of our newly leased building, we have subleased a portion of the unused floorspace on a temporary basis. This sublease may convert to a month-to-month lease upon expiration.

As of December 31, 2022, the ROU asset had a balance of $8,978 which is included in the “Operating lease right-of-use assets” line item of these consolidated financial statements and current and non-current lease liabilities related to the ROU asset of $0 and $9,823, respectively.  The $0 in current lease liability stems from expected payments from the lessor of the Bolingbrook facility reimbursing the Company for tenant improvement allowances in the amount of $1,957 over the next twelve months. As a result, the total lease liability was reduced by the expected payment, and the net effect of reimbursements received and cash paid for leases in 2023 results in net lease payments of $97, which is shown in the maturity schedule below. As of December 31, 2021, the ROU asset had a balance of $12,075 which is included in the “Operating lease right-of-use assets” line item of these consolidated financial statements and current and non-current lease liabilities related to the ROU asset of $589 and $11,700, respectively. These amounts are included in the “Current portion of operating lease obligations” and “Long-term portion of operating lease obligations” line items of these consolidated financial statements. The discount rates used for leases accounted for under ASC 842 are based on an interest rate yield curve developed for the leases in the Company’s portfolio.

The office leases contain variable lease payments which consist primarily of taxes, insurance, and common area or other maintenance costs, which are paid based on actual costs incurred by the lessor. The Company has elected to utilize the available practical expedient to combine lease and non-lease components for building leases.

Quantitative information regarding the Company’s leases is as follows:

	Twelve Months Ended December 31, 2022			Twelve Months Ended December 31, 2021
Components of lease cost
Finance lease cost components:
Amortization of finance lease assets	$	33		$	52
Interest on finance lease liabilities		4			18
Total finance lease costs		37			70
Operating lease cost components:
Operating lease cost		2,068			554
Variable lease cost		536			134
Short-term lease cost		138			49
Sub-lease income		(689	)		—
Total operating lease costs		2,053			737
Total lease cost	$	2,090		$	807

Supplemental cash flow information related to leases is as follows for the years ended December 31, 2022 and 2021:

	2022			2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases	$	1,433		$	741
Lease liabilities arising from obtaining right-of-use assets	$	12		$	10,505
Early termination of operating lease		73			—
Reduction in right of use asset due to remeasurement		(1,793	)		—
Reduction in lease liability due to remeasurement		(1,898	)		—
Weighted-average remaining lease term-finance leases (in years)		—			0.7
Weighted-average remaining lease term-operating leases (in years)		9.6			9.5
Weighted-average discount rate-finance leases		—	%		9.3	%
Weighted-average discount rate-operating leases		7.6	%		7.5	%

The future maturities of the Company’s operating leases as of December 31, 2022 are as follows:

2023	$	97
2024		2,029
2025		1,473
2026		1,471
2027		1,510
Thereafter		7,162
Total payments	$	13,742
Less amounts representing interest		(3,919	)
Total minimum payments required	$	9,823