LEASES

3 Months Ended

Mar. 31, 2023

9. LEASES:

The Company has entered into operating leases to facilitate the expansion of its manufacturing, research and development, and selling, general and administrative activities. For purposes of calculating operating lease liabilities, lease terms may be deemed to include options to extend or terminate the lease when those events are reasonably certain to occur. The interest rate implicit in lease contracts is typically not readily determinable and as such the Company uses the appropriate incremental borrowing rate based on information available at the lease commencement date in determining the present value of the lease payments. Current lease agreements do not contain any residual value guarantees or material restrictive covenants. As of March 31, 2023, the Company did not have any finance leases and had one additional operating lease that has not yet commenced.

The following table presents the Company’s operating lease cost and supplemental cash flow information related to the Company’s operating leases (in thousands):


	Three Months Ended March 31,
	2023		2022
Operating lease cost	$	1,221	$	1,098
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	—	$	—

The following table presents the Company’s operating right-of-use assets and liabilities (in thousands):


	March 31, 2023		December 31, 2022
Right-of-use assets	$	30,567	$	31,486
Short-term lease liabilities		3,811		3,737
Long-term lease liabilities		28,154		29,039

The following table presents weighted average assumptions used to compute the Company’s right-of-use assets and lease liabilities:


	March 31, 2023
Weighted average remaining lease term (in years)		7.5
Weighted average discount rate		3.4	%

As of March 31, 2023, current operating leases had remaining terms between one and nine years with options to extend the lease terms.

Undiscounted future minimum lease payments as of March 31, 2023, by year and in the aggregate, having non-cancelable lease terms in excess of one year were as follows (in thousands):


	Maturities of Operating Lease Liabilities
2023 (1)	$	3,503
2024		4,650
2025		4,704
2026		4,730
2027		4,631
Thereafter		12,129
Total lease payments		34,347
Less: Imputed interest		(3,780	)
Present value of lease payments	$	30,567

(1)

Scheduled maturities of lease liabilities represent the period from April 1, 2023 to December 31, 2023.