LEASES

3 Months Ended

Mar. 31, 2024

Leases

Leases

7.          LEASES

We have lease agreements for equipment and facilities under long-term non-cancelable leases. We determine if an arrangement is a lease at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether we obtain substantially all of the economic benefits from and have the ability to direct the use of the asset. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants.

Operating leases are included in operating lease right-of-use assets, current operating lease liabilities and long-term operating lease liabilities in our condensed consolidated balance sheet. Operating lease right-of-use assets and corresponding operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, plus payments made prior to lease commencement and any initial direct costs. Operating lease expense for operating lease assets is recognized on a straight-line basis over the lease term. As most of our leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of 12 months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related right-of-use asset or lease obligation for such contracts.

Our leases have remaining lease terms that expire at various dates through 2029. Certain of our lease terms may include options to extend or terminate the lease, and the Company includes those leases when it is reasonably certain we will exercise that option.

The following table summarizes the components of lease cost:

	Three Months Ended March 31,
(in thousands)	2024		2023
Lease Cost
Finance lease cost:
Amortization of right-of-use assets	$	—	$	9
Interest on lease obligation		—		1
Total finance lease cost		—		10
Total long-term operating lease cost		95		88
Total short-term operating lease cost		193		86
Total lease cost	$	288	$	184

The following table summarizes supplemental cash flow information related to leases:

	Three Months Ended March 31,
(in thousands)	2024		2023
Other Information
Cash paid for amounts included in the measurement of lease obligation:
Operating cash flows from operating leases	$	95	$	88
Financing cash flows from finance leases		—		—
Right-of-use assets obtained in exchange for new operating lease obligations		—		—

The following table presents other lease information related to the Company’s leases:  

	March 31,		December 31,
	2024		2023
Weighted average remaining lease term (years)
Operating leases	2.5		2.7
Finance leases	—		—
Weighted average discount rate
Operating leases	3.5	%	3.5	%
Finance leases	—	%	—	%

Future lease payments under non-cancellable leases as of March 31, 2024 were as follows:

(in thousands)	Operating Lease Obligations
Remaining fiscal 2024	$	272
2025		312
2026		141
2027		30
2028		25
Thereafter		11
Total lease payments		791
Less imputed interest		(54)
Lease obligation at March 31, 2024	$	737

Related Party Leases

The Company’s subsidiary in the United Kingdom leased facilities used for manufacturing and office space from a related party with related lease costs during the three months ended March 31, 2024 and 2023 of $52.2 thousand and $50.0 thousand, respectively. The Company’s French subsidiary leased a fleet of vehicles from a related party with related lease costs during the three months ended March 31, 2024 and 2023 of $54.0 thousand and $57.0 thousand, respectively.