The Company has five facility leases that it accounts for under ASC 842, and these include the operating leases for its corporate facility in San Jose, California, and facilities in Toronto, Markham and Waterloo, Ontario, Canada. The Waterloo and Toronto leases expire in September 2022 and December 2023, respectively. The current San Jose lease with a sublessor expires in July 2022, and the Company entered into a new, direct lease with the facility landlord, dated April 13, 2022, for an 18-month term, which commenced July 15, 2022. In addition, on May 26, 2022, the Company entered into a new lease for a facility in Markham, Ontario with a 60-month term, which commenced June 21, 2022. The Markham landlord also provided a lease incentive of approximately $220,000 (the Incentive), which will be payable to the Company as follows: one-half of the Incentive payable subsequent to the completion of the improvements to the leased space and the second half-ratably on an annual basis commencing with the second year of the lease.

The right-to-use assets and corresponding liabilities for the facility leases were measured at the present value of the future minimum lease payments. The discount rate used to measure the lease assets and liabilities were 8%. Lease expense is recognized on a straight-line basis over the lease term.

On March 1, 2022, the Company entered into a 36-month finance lease agreement for the lease of equipment resulting in the recognition of a right-of-use asset and lease liability on the balance sheet of approximately $274,000.

The following table provides the details of right-of-use assets and lease liabilities as of September 30, 2022 (in thousands):


	Nine Months Ended
	September 30, 2022
Right-of-use assets:
Operating leases	$	957
Finance lease		224
Total right-of-use assets	$	1,181
Lease liabilities:
Operating leases	$	954
Finance lease		233
Total lease liabilities	$	1,187

Future minimum payments under the leases at September 30, 2022 are listed in the table below (in thousands):


Year ending December 31,
2022	$	67
2023		742
2024		216
2025		132
2026		106
2027		67
Total future lease payments		1,330
Less: imputed interest		(143	)
Present value of lease liabilities	$	1,187

The following table provides the details of supplemental cash flow information (in thousands):

	Nine Months Ended
	September 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for leases	$	504	$	273

Rent expense was approximately $0.2 million for each of the three-month periods ended September 30, 2022 and 2021. Rent expense was approximately $0.5 million for the nine months ended September 30, 2022 and $0.3 million for the nine months ended September 30, 2021. In addition to the minimum lease payments, the Company is responsible for property taxes, insurance and certain other operating costs related to the leased facilities and equipment.

In the ordinary course of business, the Company enters into contractual arrangements under which it may agree to indemnify the counterparties from any losses incurred relating to breach of representations and warranties, failure to perform certain covenants, or claims and losses arising from certain events as outlined within the particular contract, which may include, for example, losses arising from litigation or claims relating to past performance. Such indemnification clauses may not be subject to maximum loss clauses. The Company has also entered into indemnification agreements with its officers and directors. No material amounts were reflected in the Company’s condensed consolidated financial statements for the nine months ended September 30, 2022 and 2021 related to these indemnifications.

The Company has not estimated the maximum potential amount of indemnification liability under these agreements due to the limited history of prior claims and the unique facts and circumstances applicable to each particular agreement. To date, the Company has not made any payments related to these indemnification agreements.

The Company warrants certain of its products to be free of defects generally for a period of three years. The Company estimates its warranty costs based on historical warranty claim experience and includes such costs in cost of net revenues. Warranty costs were not material for the nine months ended September 30, 2022 and 2021.

The Company is not a party to any legal proceeding that the Company believes is likely to have a material adverse effect on its condensed consolidated financial position or results of operations. From time to time the Company may be subject to legal proceedings and claims in the ordinary course of business. These claims, even if not meritorious, could result in the expenditure of significant financial resources and diversion of management efforts.