Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

5. Leases

We lease 23,890 square feet of office space in Minneapolis, Minnesota, which houses our principal executive offices and our manufacturing facility. We lease this space under an operating lease agreement that commenced December 1, 2008 and expires July 31, 2024. We intend to add new facilities as we grow, and we believe that suitable additional or substitute space will be available as needed to accommodate any such expansion of our operations. Our operating lease agreement includes an option to renew for one additional period of five years. The exercise of the lease renewal option is at our sole discretion and was not included in the lease term for the calculation of the ROU asset and lease liability upon adoption of ASC 842 on January 1, 2022, as it is not reasonably certain of exercise.

In addition to base rent, we will also pay our proportionate share of operating expenses, as defined in the lease. These payments will be made monthly and will be adjusted annually to reflect actual charges incurred for operating expenses, such as common area maintenance, taxes and insurance.

The following table presents the lease balances within the condensed consolidated balance sheets:

	September 30,
(in thousands)	2022
Right-of-use assets:
Operating lease right-of-use asset	$	391
Operating lease liabilities:
Accrued expenses		218
Operating lease liability, non-current portion		175
Total operating lease liabilities	$	393

Maturities of our lease liability for our operating lease are as follows as of September 30, 2022:

	September 30,
(in thousands)	2022
2022	$	58
2023		234
2024		119
Total undiscounted lease payments		411
Less: imputed interest		(18)
Present value of lease liability	$	393

As of September 30, 2022, the remaining lease term was 1.8 years and the discount rate was 5.0%. The operating cash outflows from our operating lease were $0.3 million for the nine months ended September 30, 2022.