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Leases

6 Months Ended

Jun. 30, 2023

9. LEASES

Lessee:

The Company has operating leases for its corporate headquarters, a training facility and office equipment, including copiers. The Company leases an approximately 32,000 square foot facility in Malvern, Pennsylvania for its corporate headquarters, which includes office and warehouse space. The Company leases an approximately 9,600 square foot facility in Charlotte, North Carolina as a training facility for its NeuroStar Advanced Therapy Systems. The Company does not currently have any finance leases or executed leases that have not yet commenced.

Operating lease rent expense was $0.2 million for the three months ended June 30, 2023 and 2022, and $0.4 million for the six months ended June 30, 2023 and 2022. As of June 30, 2023, the weighted-average remaining lease term of operating leases was 4.6 years and the weighted-average discount rate was 7.2%.

The following table presents the supplemental cash flow information as a lessee related to leases (in thousands):


	Six Months Ended
	June 30, 2023		June 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	521	$	425

The following table sets forth by year the required future payments of operating lease liabilities (in thousands):


	June 30, 2023
Remainder of 2023	$	428
2024		875
2025		898
2026		921
2027		882
Thereafter		116
Total lease payments		4,120
Less imputed interest		(623)
Present value of operating lease liabilities	$	3,497

Lessor sales-type leases:

Certain customers have purchased NeuroStar Advanced Therapy Systems on a rent-to-own basis. The lease term is three or four years with a customer option to purchase the NeuroStar Advanced Therapy System at the end of the lease or automatic transfer of ownership of the NeuroStar Advanced Therapy System at the end of the lease.

The following table sets forth the profit recognized on sales-type leases (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Profit recognized at commencement, net	$	47	$	373	$	47	$	420
Interest income		—		—		—		—
Total sales-type lease income	$	47	$	373	$	47	$	420

The following table sets forth a maturity analysis of the undiscounted lease receivables related to sales-type leases (in thousands):


	June 30,
	2023
Remainder of 2023	$	610
2024		851
2025		376
2026		67
2027		27
Total sales-type lease receivables	$	1,931

As of June 30, 2023, the carrying amount of the lease receivables is $1.9 million. The Company does not have any unguaranteed residual assets.

Lessor operating leases:

NeuroStar Advanced Therapy Systems sold for which collection is not probable are accounted for as operating leases. For the three months ended June 30, 2023 and 2022, the Company recognized operating lease income of $0.04 million and $0.05 million, respectively. For the six months ended June 30, 2023 and 2022, the Company recognized operating lease income of $0.1 million and $0.1 million, respectively.

The Company maintained rental equipment, net of $0.4 million as of June 30, 2023 and December 31, 2022, respectively, which are included in “Property and equipment, net” on the balance sheet. Rental equipment depreciation expense was $0.02 million for the three months ended June 30, 2023 and 2022, and $0.04 million and $0.05 million for the six months ended June 30, 2023 and 2022, respectively.