Leases

12 Months Ended

Dec. 31, 2022

Leases

Leases

7. Leases

On March 1, 2021, the Company entered into an office lease agreement (the “Lease”) with Globe Building Company (the “Landlord”), under which the Company leases executive office space and manufacturing facilities of approximately 43,100 square feet of rentable space located at 710 N. Tucker Boulevard, St. Louis, Missouri (the “Premises”) that serves as the Company’s new principal executive and administrative offices and manufacturing facility. Lease payments commenced on January 1, 2022, and the lease has a term of ten years, with two renewal options of five years each. The minimum annual rent under the terms of the Lease ranges from approximately $0.8 million in 2022 to $1.0 million in 2031. The Company gained access to the Premises in the third quarter 2021 to begin constructing leasehold improvements. In accordance with ASC 842, the Company recorded a ROU asset and lease liability. The initial recognition of the ROU asset and lease liability was $5.9 million. In the fourth quarter of 2021, the Company received an occupancy permit and relocated its operations to the new leased space.

As of December 31, 2022, the weighted average discount rate for operating leases was 9% and the weighted average remaining lease term for operating lease term is 8.99 years.

The following table represents lease costs and other lease information (in thousands):

	Year Ended December 31,
	2022		2021
Operating lease cost	$	909	$	2,707
Short-term lease cost		28		57
Sublease income		-		(986	)
Total net lease cost	$	937	$	1,778
Cash paid within operating cash flows	$	886	$	2,223

Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities and equipment which are paid based on actual costs incurred.

Future minimum payments for operating leases with initial or remaining terms of one year or more as of December 31, 2022, were as follows (in thousands):

	December 31, 2022
2023	$	877
2024		898
2025		919
2026		935
2027		956
2028 and thereafter		4,030
Total lease payments	$	8,615
Less: Interest		(2,754	)
Present value of lease liabilities	$	5,861