Leases

3 Months Ended

Mar. 31, 2023

The Company maintains its corporate headquarters in a leased building located in Billerica, Massachusetts. The Company maintains its design and manufacturing facilities in leased buildings located in Wilmington, Massachusetts, Wallingford, Connecticut and Hyderabad, India.

The Company's leases have remaining lease terms of approximately one-to-five years, some of which include one or more options to extend the leases for up to five years per renewal. The exercise of lease renewal options is at the sole discretion of the Company. The amounts disclosed in the Consolidated Balance Sheet pertaining to right-of-use assets and lease liabilities are measured based on management’s current expectations of exercising its available renewal options.

On May 11, 2021, the Company executed an amendment to extend the term of the Wilmington lease through September 30, 2027.

The Company’s existing leases are not subject to any restrictions or covenants which preclude its ability to pay dividends, obtain financing, or enter into additional leases.

As of March 31, 2023, the Company had not entered into any leases which have not yet commenced which would entitle the Company to significant rights or create additional obligations.

The Company uses either its incremental borrowing rate or the implicit rate in the lease agreement as the basis to calculate the present value of future lease payments at lease commencement. The incremental borrowing rate represents the rate the Company would have to pay to borrow funds on a collateralized basis over a similar term and in a similar economic environment.

The components of lease expense and related cash flows were as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Rent expense	$	489	$	479
Variable lease cost (1)	41		108
	$	530	$	587

(1) Variable operating lease expenses consist primarily of common area maintenance and real estate taxes for the three months ended March 31, 2023 and 2022.

As of March 31, 2023, the remaining weighted-average lease term of the operating leases was 3.6 years and the weighted-average discount rate was 6.0%.

The future minimum rental payments under these agreements as of March 31, 2023 were as follows (in thousands):


Year	Minimum Lease Payments




2023	1,816
2024	2,126
2025	1,872
2026	972
2027	741
Total lease payments	$	7,527
Present value adjustment	(1,003)
Present value of lease liabilities	$	6,524