Leases

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Leases

Leases

In July 2021, the Company entered into a long-term rental agreement to lease its manufacturing facility in Waller, Texas, for $40 thousand per month for sixty-four months. Rental income recognized during the three months ended March 31, 2022 was $121 thousand and was included in other income in the consolidated statement of operations. As discussed in Note 1, “Organization and Nature of Operations” this facility was sold on April 18, 2022 and the lease agreement between the tenant and the Company terminated.

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 thousand per month, and the tenant occupied the warehouse facility in September 2021. Rental income recognized during the three months ended March 31, 2022 was $185 thousand and was included in other income in the consolidated statement of operations.

In March 2022, the Company entered into an agreement with its landlord to terminate the lease on its facility in Calgary, Alberta for a one-time termination fee of $85 thousand. This lease was previously scheduled to continue until 2033, and due to its early termination, the Company recorded a gain on lease termination from the reduction of lease liabilities and ROU assets of $0.6 million that is included in the consolidated statements of operations during the three months ended March 31, 2022.

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

	Three months ended March 31,
	2022		2021
Operating lease expense	$	228	$	238
Finance lease expense:
Amortization of right-of-use assets	4		4
Interest on lease liabilities	3		3
Total finance lease expense	7		7
Short-term lease expense	124		69
Total lease expense	$	359	$	314
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	(375)	$	(372)
Operating cash flows from finance leases	(10)		(3)
Financing cash flows from finance leases	(3)		(14)

Maturities of lease liabilities as of March 31,2022 are as follows (in thousands):

Years ending December 31,	Operating Leases		Finance Leases
2022 (excluding three months ended March 31, 2022)	$	775	$	35
2023	1,221		39
2024	1,247		18
2025	1,274		—
2026	1,302		—
Thereafter	4,783		—
Total lease payments	$	10,602	$	92
Less: Interest	(3,177)		(12)
Present value of lease liabilities	$	7,425	$	80

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

	March 31, 2022			December 31, 2021
Operating Leases
Operating lease right-of-use assets	$	1,827		$	2,041
Current portion of operating lease liabilities	619			602
Long-term operating lease liabilities	6,806			7,779
Total operating lease liabilities	$	7,425		$	8,381
Finance Leases
Property and equipment	$	147		$	147
Accumulated depreciation	(37)			(33)
Property and equipment, net	$	110		$	114
Current portion of finance lease liabilities	$	33		$	41
Long-term finance lease liabilities	47			53
Total finance lease liabilities	$	80		$	94
Weighted Average Remaining Lease Term
Operating leases	8.9 years			9.1 years
Finance leases	2.7 years			2.9 years
Weighted Average Discount Rate
Operating leases	8.9		%	8.9		%
Finance leases	8.9		%	8.9		%

Leases

Leases

In July 2021, the Company entered into a long-term rental agreement to lease its manufacturing facility in Waller, Texas, for $40 thousand per month for sixty-four months. Rental income recognized during the three months ended March 31, 2022 was $121 thousand and was included in other income in the consolidated statement of operations. As discussed in Note 1, “Organization and Nature of Operations” this facility was sold on April 18, 2022 and the lease agreement between the tenant and the Company terminated.

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 thousand per month, and the tenant occupied the warehouse facility in September 2021. Rental income recognized during the three months ended March 31, 2022 was $185 thousand and was included in other income in the consolidated statement of operations.

In March 2022, the Company entered into an agreement with its landlord to terminate the lease on its facility in Calgary, Alberta for a one-time termination fee of $85 thousand. This lease was previously scheduled to continue until 2033, and due to its early termination, the Company recorded a gain on lease termination from the reduction of lease liabilities and ROU assets of $0.6 million that is included in the consolidated statements of operations during the three months ended March 31, 2022.

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

	Three months ended March 31,
	2022		2021
Operating lease expense	$	228	$	238
Finance lease expense:
Amortization of right-of-use assets	4		4
Interest on lease liabilities	3		3
Total finance lease expense	7		7
Short-term lease expense	124		69
Total lease expense	$	359	$	314
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	(375)	$	(372)
Operating cash flows from finance leases	(10)		(3)
Financing cash flows from finance leases	(3)		(14)

Maturities of lease liabilities as of March 31,2022 are as follows (in thousands):

Years ending December 31,	Operating Leases		Finance Leases
2022 (excluding three months ended March 31, 2022)	$	775	$	35
2023	1,221		39
2024	1,247		18
2025	1,274		—
2026	1,302		—
Thereafter	4,783		—
Total lease payments	$	10,602	$	92
Less: Interest	(3,177)		(12)
Present value of lease liabilities	$	7,425	$	80

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

	March 31, 2022			December 31, 2021
Operating Leases
Operating lease right-of-use assets	$	1,827		$	2,041
Current portion of operating lease liabilities	619			602
Long-term operating lease liabilities	6,806			7,779
Total operating lease liabilities	$	7,425		$	8,381
Finance Leases
Property and equipment	$	147		$	147
Accumulated depreciation	(37)			(33)
Property and equipment, net	$	110		$	114
Current portion of finance lease liabilities	$	33		$	41
Long-term finance lease liabilities	47			53
Total finance lease liabilities	$	80		$	94
Weighted Average Remaining Lease Term
Operating leases	8.9 years			9.1 years
Finance leases	2.7 years			2.9 years
Weighted Average Discount Rate
Operating leases	8.9		%	8.9		%
Finance leases	8.9		%	8.9		%