Leases

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

LEASES

NOTE 11 LEASES 

Operating Leases

The Company has operating leases for office, manufacturing and warehouse space, along with office equipment. The carrying values of operating lease right-of-use (“ROU”) assets and operating lease liabilities as of March 31, 2022 and December 31, 2021 were as follows:

	March 31,		December 31,
(Amounts in thousands)	2022		2021
Operating lease ROU assets	$	13,398	$	3,717
Operating lease liability	$	13,584	$	3,873

On February 1, 2022, the Company entered into a lease agreement with the new owners of the Tucson Building (see Note 10 - Property and Equipment, Net), for a term of 10 years with no option to renew. Monthly rent increases annually from $98,300 per month in year one to $128,200 a month in the final year of the lease. The Company posted a $1.0 million security deposit in connection with the commencement of the lease, which is classified within other assets – long term on the balance sheet. The Company determined that the transactions represented a sale and leaseback and, accordingly, established a new operating lease ROU asset and operating lease liability of $10.1 million. The lease did not include an implicit rate of return; therefore, the Company used an incremental borrowing rate based on other leases with similar terms. See Note 18 – Subsequent Events - Lease Developments for information related to the subsequent lease default and lease abandonment.

Other information related to the Company’s operating leases are as follows:

	For the Three Months Ended
	March 31,
(Amounts in thousands)	2022		2021
Operating lease cost	$	611	$	252
Short-term lease cost	$	9	$	39
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	549	$	259

The following table presents the weighted-average remaining lease term and weighted average discount rates related to the Company’s operating leases as of March 31, 2022, and December 31, 2021:

	March 31,	December 31,
(Amounts in thousands)	2022	2021
Weighted average remaining lease term	8.75 years	6.12 years
Weighted average discount rate	5.58%	6.18%

The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the consolidated balance sheet as of March 31, 2022:

	Operating
(Amounts in thousands)	Leases
2022	$	1,880
2023		2,397
2024		2,065
2025		1,730
2026		1,386
Thereafter		8,286
Total minimum lease payments		17,744
Less: effect of discounting		(4,160	)
Present value of future minimum lease payments		13,584
Less: current obligations under leases		(1,729	)
Long-term lease obligations	$	11,855

Finance Leases

The Company has finance leases for certain manufacturing and office equipment.

The following table presents the weighted-average remaining lease term and weighted average discount rates related to the Company’s finance leases as of March 31, 2022:

	March 31,
(Amounts in thousands)	2022
Weighted average remaining lease term		2.86
Weighted average discount rate		6.44	%

The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the finance lease liabilities recorded on the condensed consolidated balance sheet as of March 31, 2022:

	Finance
(Amounts in thousands)	Leases
2022	$	56
2023		63
2024		49
2025		11
2026		6
Total minimum lease payments		185
Less: effect of discounting		(8	)
Present value of future minimum lease payments		177
Less: current obligations under leases		(65	)
Long-term lease obligations	$	112