Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

Note 8 – 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 condensed 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.

As of September 30, 2023 the Company held four leases for office, manufacturing and warehouse facilities in Aliso Viejo, California. The four leases are for approximately 121,000 square feet in the aggregate and expire between August 31, 2024 and January 31, 2026. For one of the facilities operating leases, the lessor provided $900,000 in tenant allowances.

On April 4, 2022, the Company entered into a thirty-four-month sublease agreement for a portion of the 5 Columbia Building, in Aliso Viejo, CA. The sublease commencement date was June 13, 2022 and will expire on March 31, 2025. The base rent receivable is $11,410 per month. On January 4, 2023 the Company entered into a second amendment to the sublease agreement adjusting the base rent receivable to $5,319 per month.

The following table presents the lease balances within the Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 (in thousands):

		September 30,		December 31,
Leases	Classification	2023		2022
Assets
Operating	Operating leases right-of-use assets	$	2,793	$	3,943
Finance	Property and equipment, net		46		206
Total lease assets			2,839		4,149
Liabilities
Current
Operating	Lease liabilities		1,934		1,818
Finance	Lease liabilities		42		152
Noncurrent
Operating	Long-term lease liabilities		1,354		2,813
Finance	Long-term lease liabilities		—		43
Total lease liabilities		$	3,330	$	4,826

For the three and nine months ended September 30, 2023 and 2022, the components of operating and finance lease expenses were as follows (in thousands):

		Three Months Ended September 30,				Nine Months Ended September 30,
Lease Cost	Classification	2023		2022		2023		2022
Operating lease cost	Cost of sales	$	3	$	4	$	10	$	10
	Research and development		20		83		81		242
	Selling, general and administrative		440		425		1,326		1,257
Finance lease cost	Research and development		29		30		92		76
	Selling, general and administrative		9		9		27		18
Finance lease cost	Interest expense		2		5		8		12

Maturities of the Company’s operating and finance lease liabilities as of September 30, 2023 were as follows (in thousands):

	Operating			Finance
Year Ended December 31,	Leases			Leases
2023 (remainder)	$	549		$	27
2024		1,960			16
2025		1,044			—
2026		79			—
2027		—			—
2028		—			—
Total lease payments		3,632			43
Less: imputed interest		(344	)		(1	)
Total lease liabilities	$	3,288		$	42

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 September 30, 2023 and December 31, 2022 were:

	September 30,			December 31,
Lease Term and Discount Rate	2023			2022
Weighted average remaining lease term (years)
Operating leases		1.85			2.42
Finance leases		0.40			1.29
Weighted average discount rate
Operating leases		10.3	%		10.3	%
Finance leases		9.4	%		9.5	%