Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

Leases

In August 2021, the company entered into a five-year triple net operating lease agreement to lease its warehouse facility in Monahans, Texas, for $20,000 per month, and the tenant occupied the warehouse facility in September 2021. The Company will recognize rental income, including rent, taxes and insurance over the lease period. Rental income recognized during the year ended December 31, 2021 was $76,000 and was included in other income in the consolidated statement of operations.

In July 2021, the Company entered into a long-term rental agreement to lease its manufacturing facility in Waller, Texas, for $40,000 per month for sixty-four months. Rental income recognized during the year ended December 31, 2021 was $121,000 and was included in other income in the consolidated statement of operations.

During the first quarter of 2020, the Company ceased use of the corporate headquarters leased offices and moved corporate employees to the Global Research and Innovation Center (“GRIC”) during the second quarter of 2020. In addition, the operating lease liability and corresponding operating lease right-of-use (“ROU”) assets for the corporate headquarters and GRIC were remeasured to remove the anticipated term extensions as the Company determined it was no longer reasonably certain to utilize the extension at the GRIC. The remeasurement resulted in reductions to lease liabilities and ROU assets totaling of $6.2 million during the year ended December 31, 2020.

In addition, during the year ended December 31 2020, the Company recorded an impairment of the ROU assets totaling $7.4 million. No impairment was recognized during the year ended December 31, 2021. Refer to Note 10, “Impairment of Property and Equipment, Operating Lease Right-of-use Assets and Intangible Assets”.

The components of lease expense and supplemental cash flow information are as follows (in thousands):

	Years ended December 31,
	2021		2020
Operating lease expense	$	797	$	1,370
Finance lease expense:
Amortization of right-of-use assets	15		17
Interest on lease liabilities	12		18
Total finance lease expense	27		35
Short-term lease expense	267		202
Total lease expense	$	1,091	$	1,607
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,107	$	2,884
Operating cash flows from finance leases	62		18
Financing cash flows from finance leases	8		70

Maturities of lease liabilities as of December 31,2021 are as follows (in thousands):

Years ending December 31,	Operating Leases		Finance Leases
2022	$	1,254	$	47
2023	1,318		39
2024	1,348		23
2025	1,375
2026	1,423		—
Thereafter	5,453		—
Total lease payments	$	12,171	$	109
Less: Interest	(3,790)		(15)
Present value of lease liabilities	$	8,381	$	94

Supplemental balance sheet information related to leases is as follows (in thousands):

	December 31, 2021			December 31, 2020
Operating Leases
Operating lease right-of-use assets	$	2,041		$	2,320
Current portion of operating lease liabilities	$	602		$	636
Long-term operating lease liabilities	7,779			8,348
Total operating lease liabilities	$	8,381		$	8,984
Finance Leases
Property and equipment	$	147		$	147
Accumulated depreciation	(33)			(26)
Property and equipment, net	$	114		$	121
Current portion of finance lease liabilities	$	41		$	60
Long-term finance lease liabilities	53			96
Total finance lease liabilities	$	94		$	156
Weighted Average Remaining Lease Term
Operating leases	9.1 years			9.9 years
Finance leases	2.9 years			3.1 years
Weighted Average Discount Rate
Operating leases	8.9		%	8.9		%
Finance leases	8.9		%	9.0		%

Leases

Leases

In August 2021, the company entered into a five-year triple net operating lease agreement to lease its warehouse facility in Monahans, Texas, for $20,000 per month, and the tenant occupied the warehouse facility in September 2021. The Company will recognize rental income, including rent, taxes and insurance over the lease period. Rental income recognized during the year ended December 31, 2021 was $76,000 and was included in other income in the consolidated statement of operations.

In July 2021, the Company entered into a long-term rental agreement to lease its manufacturing facility in Waller, Texas, for $40,000 per month for sixty-four months. Rental income recognized during the year ended December 31, 2021 was $121,000 and was included in other income in the consolidated statement of operations.

During the first quarter of 2020, the Company ceased use of the corporate headquarters leased offices and moved corporate employees to the Global Research and Innovation Center (“GRIC”) during the second quarter of 2020. In addition, the operating lease liability and corresponding operating lease right-of-use (“ROU”) assets for the corporate headquarters and GRIC were remeasured to remove the anticipated term extensions as the Company determined it was no longer reasonably certain to utilize the extension at the GRIC. The remeasurement resulted in reductions to lease liabilities and ROU assets totaling of $6.2 million during the year ended December 31, 2020.

In addition, during the year ended December 31 2020, the Company recorded an impairment of the ROU assets totaling $7.4 million. No impairment was recognized during the year ended December 31, 2021. Refer to Note 10, “Impairment of Property and Equipment, Operating Lease Right-of-use Assets and Intangible Assets”.

The components of lease expense and supplemental cash flow information are as follows (in thousands):

	Years ended December 31,
	2021		2020
Operating lease expense	$	797	$	1,370
Finance lease expense:
Amortization of right-of-use assets	15		17
Interest on lease liabilities	12		18
Total finance lease expense	27		35
Short-term lease expense	267		202
Total lease expense	$	1,091	$	1,607
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,107	$	2,884
Operating cash flows from finance leases	62		18
Financing cash flows from finance leases	8		70

Maturities of lease liabilities as of December 31,2021 are as follows (in thousands):

Years ending December 31,	Operating Leases		Finance Leases
2022	$	1,254	$	47
2023	1,318		39
2024	1,348		23
2025	1,375
2026	1,423		—
Thereafter	5,453		—
Total lease payments	$	12,171	$	109
Less: Interest	(3,790)		(15)
Present value of lease liabilities	$	8,381	$	94

Supplemental balance sheet information related to leases is as follows (in thousands):

	December 31, 2021			December 31, 2020
Operating Leases
Operating lease right-of-use assets	$	2,041		$	2,320
Current portion of operating lease liabilities	$	602		$	636
Long-term operating lease liabilities	7,779			8,348
Total operating lease liabilities	$	8,381		$	8,984
Finance Leases
Property and equipment	$	147		$	147
Accumulated depreciation	(33)			(26)
Property and equipment, net	$	114		$	121
Current portion of finance lease liabilities	$	41		$	60
Long-term finance lease liabilities	53			96
Total finance lease liabilities	$	94		$	156
Weighted Average Remaining Lease Term
Operating leases	9.1 years			9.9 years
Finance leases	2.9 years			3.1 years
Weighted Average Discount Rate
Operating leases	8.9		%	8.9		%
Finance leases	8.9		%	9.0		%