Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Lessee

Note 15 – Leases

The Company has operating and finance leases for facilities and certain equipment. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company does not combine lease and non-lease components in the recognition of lease expense.

The Company’s leases have remaining non-cancelable lease terms of approximately 1 year to 4 years, some of which include options to extend the leases for up to 10 years. The exercise of lease renewal options is at the Company’s sole discretion. The Company recognizes rent expense for minimum lease payments on a straight-line basis over the expected lease term, including rent holidays, rent escalation clause and/or cancelable option periods where failure to exercise such options would result in an economic penalty.

As of December 31, 2021 and 2020, the Company held three leases for office, manufacturing and warehouse facilities in Aliso Viejo, California. The three leases are for 19,680, 42,106 and 48,036 square feet and expire on June 30, 2023, September 30, 2024 and January 31, 2026, respectively. For one of the facilities operating leases, the lessor provided $900,000 in tenant allowances.

The following table presents the lease balances within the consolidated balance sheets (in thousands):

		December 31,		December 31,
Leases	Classification	2021		2020
Assets
Operating	Operating leases right-of-use assets		4,284	$	5,319
Finance	Property and equipment, net		33		58
Total lease assets			4,317		5,377
Liabilities
Current
Operating	Lease liabilities		1,509		1,247
Finance	Lease liabilities		20		27
Noncurrent
Operating	Long-term lease liabilities		3,625		5,042
Finance	Long-term lease liabilities		17		37
Total lease liabilities		$	5,171	$	6,353

As the implicit rates in the Company’s leases were not readily available, the incremental borrowing rate was determined based upon information available at the lease commencement date in determining the present value of future lease payments.

For the years ended December 31, 2021 and 2020, the components of operating and finance lease expenses were as follows (in thousands):

		Year Ended December 31,
Lease Cost	Classification	2021		2020
Operating lease cost	Cost of sales	$	14	$	13
	Research and development		297		180
	Selling, general and administrative		1,608		1,544
Finance lease cost	Research and development		—		115
	Selling, general and administrative		25		44
Finance lease cost	Interest expense		5		14

Maturities of the Company’s operating and finance lease liabilities as of December 31, 2021, were as follows (in thousands):

	Operating		Finance
Year Ended December 31,	Leases		Leases
2022		1,976		23
2023		1,683		18
2024		1,456		—
2025		951		—
2026		79		—
Total lease payments		6,145		41
Less: imputed interest		1,011		4
Total lease liabilities	$	5,134	$	37

The weighted average remaining lease term and weighted average discount rate used to determine lease liabilities related to the Company’s operating and finance leases as of December 31, 2021 and 2020 were:

	December 31,	December 31,
Lease Term and Discount Rate	2021	2020
Weighted average remaining lease term (years)
Operating leases	3.30	4.21
Finance leases	1.72	2.42
Weighted average discount rate
Operating leases	10.5%	10.5%
Finance leases	10.5%	10.5%